REPRESENTATIVE PRACTICE TEST
2026 COMPLETE QUESTIONS AND
VERIFIED ANSWERS
◉ What is a trade surplus? Answer: A situation where exports exceed
imports.
◉ What is a trade deficit? Answer: A situation where imports exceed
exports.
◉ What is comparative advantage? Answer: Specializing in the
production of goods or services with the lowest opportunity cost.
◉ What is opportunity cost? Answer: The value of the next best
alternative.
◉ What is the primary advantage of international licensing for the
licensor? Answer: The licensor can charge a royalty fee for each unit
sold without bearing the risk of product sales.
◉ How does international franchising differ from licensing? Answer:
Franchising involves the franchisee using the business name and selling
products in a market while the franchisor retains control over certain
operations.