AP AP Trade, Resources & Economic Geography 1

Question 1

Comparative advantage in international trade means a country should:

Accepted Answer

Specialize in goods it produces at a relatively lower opportunity cost

Answer

Comparative advantage holds that countries benefit from specializing in goods they produce at the lowest opportunity cost relative to other goods, even if another country is absolutely better at producing everything.

Question 2

A free trade zone (FTZ) is an area where:

Accepted Answer

Goods can be imported, stored, or processed with reduced tariffs

Answer

FTZs are designated areas where goods can be handled with minimal customs duties, encouraging trade and foreign investment.

Question 3

Which sector of the economy involves extracting raw materials directly from the earth?

Accepted Answer

Primary sector

Answer

The primary sector encompasses activities like mining, farming, fishing, and forestry that extract or harvest natural resources.

Question 4

The 'resource curse' refers to the phenomenon where:

Accepted Answer

Resource-rich countries often experience slower economic growth and poor governance

Answer

The resource curse describes how countries with abundant natural resources often suffer from economic mismanagement, corruption, and conflict rather than sustained development.

Question 5

Export Processing Zones (EPZs) are primarily used by developing countries to:

Accepted Answer

Attract foreign manufacturing investment by offering tax breaks and relaxed regulations

Answer

EPZs offer incentives like tax holidays and looser labor regulations to attract foreign factories, aiming to generate employment and foreign exchange.

AP Practice Test

AP Practice Test

AP AP Trade, Resources & Economic Geography 1