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Practice Assessment — Task 1: Trade & Protection (Data Interpretation / Short Answer)

This practice task mirrors Task 1 in the course assessment outline: a data-interpretation/short-answer paper on Australia's international trade and on free trade & protection. It is built to the SCSA format — ten multiple-choice items followed by two extended data/short-answer questions in parts. Work under timed conditions (recommended 50 minutes) for the best practice value.

Section One — Multiple choice (10 marks)

Choose the single best answer for each.

1. Australia is best described as a:

  1. large closed economy
  2. medium-sized open economy
  3. small closed economy
  4. large open economy with no trade exposure

2. A country has a comparative advantage in a good when it can produce that good at a lower:

  1. total cost than any other country
  2. opportunity cost than another country
  3. wage rate than another country
  4. world price than another country

3. Which is the largest category of Australia's goods exports by value?

  1. elaborately transformed manufactures
  2. rural and agricultural goods
  3. mineral and energy resources
  4. services

4. A tariff on imported steel will most likely:

  1. lower the domestic price of steel
  2. increase domestic consumption of steel
  3. increase domestic production of steel
  4. increase the quantity of steel imported

5. A subsidy paid to domestic producers differs from a tariff because it:

  1. raises the price paid by consumers
  2. has a cost borne by the government budget
  3. is a tax on imports
  4. reduces domestic production

6. The gains from specialisation and trade are maximised when countries specialise according to their:

  1. absolute advantage only
  2. comparative advantage
  3. largest population
  4. highest wages

7. Which is an argument for protection?

  1. it lowers prices for consumers
  2. it improves the efficient allocation of resources
  3. it protects infant industries while they develop
  4. it increases the variety of goods available

8. On a demand and supply diagram for an imported good, a tariff is shown as:

  1. a leftward shift of the domestic demand curve
  2. a rightward shift of the domestic supply curve
  3. a rise in the world-price line by the amount of the tariff
  4. a fall in the world-price line

9. A bilateral free trade agreement is one between:

  1. two countries
  2. all members of the WTO
  3. a country and a regional bloc
  4. three or more countries

10. A move toward trade liberalisation is most likely to:

  1. raise tariffs and quotas
  2. improve efficiency through greater competition
  3. reduce the variety of goods available
  4. increase protection of domestic industries

Section Two — Question 11: Trade & comparative advantage (15 marks)

11(a). Calculate the opportunity cost of producing one unit of cloth in each country. Show your working.

11(b). State which country has the comparative advantage in cloth, and justify your answer.

11(c). Explain how specialisation according to comparative advantage allows total output to rise. (4 marks)

11(d). Other than goods trade, describe two ways Australia is linked to the global economy. (4 marks)

Section Two — Question 12: Protection (15 marks)

12(a). On the axes provided, draw a demand and supply diagram for the sugar market. Show the world price, the world-price-plus-tariff line, and label the change in imports. (5 marks)

12(b). Explain the effect of the tariff on domestic producers and on domestic consumers. (4 marks)

12(c). Analyse the impact of the tariff on the efficient allocation of resources in the economy. (6 marks)

Marking guide (teacher)