Cambridge International (CAIE) · 6 International economic issues (AS) · 6.1 The reasons for international trade

Cambridge International (CAIE) Economics past paper questions: The reasons for international trade

Every Cambridge International (CAIE) question on The reasons for international trade from 2023 to 2025: 6 essays, 3 data response questions and 14 multiple choice questions. It covers 1.5 Production possibility curves, 6.3 Current account of the balance of payments, 1.1 Scarcity, choice and opportunity cost, 6.4 Exchange rates and 2.4 The interaction of demand and supply. Each question links to its paper, mark scheme and examiner report.

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Subtopics1.5 Production possibility curves 26.3 Current account of the balance of payments 21.1 Scarcity, choice and opportunity cost 16.4 Exchange rates 12.4 The interaction of demand and supply 16.2 Protectionism 14.3 Aggregate demand and aggregate supply analysis 13.3 Addressing income and wealth inequality 14.5 Unemployment 1

Essay questions on the reasons for international trade

AS Paper 2, March 2025, Q4(a)OptionalExplain8 marks

With the help of a formula, explain two reasons for an improvement in the terms of trade and consider the extent to which an improvement in the terms of trade will benefit an economy.

Question paper p.4 Mark scheme p.16 Examiner report p.5 Open in the tool

AS Paper 2, March 2025, Q4(b)OptionalAssess12 marks

Assess the extent to which the consequences of free trade are always positive for an economy.

Question paper p.4 Mark scheme p.17 Examiner report p.5 Open in the tool

AS Paper 2, June 2024, Q5(b)OptionalAssess12 marks

Assess whether free trade is always better than a policy of protectionism for a developing economy that wishes to trade internationally.

Question paper p.4 Mark scheme p.20 Open in the tool

AS Paper 2, November 2023, Q4(a)OptionalExplain8 marks

Explain the difference between the terms of trade and the balance of trade in goods and consider whether an economy should be more concerned about its terms of trade than its balance of trade in goods.

Question paper p.4 Mark scheme p.16 Examiner report p.12 Open in the tool

AS Paper 2, November 2023, Q4(b)OptionalAssess12 marks

Assess whether a rise or a fall in the terms of trade will benefit the macroeconomic performance of an open economy that is heavily dependent on international trade.

Question paper p.4 Mark scheme p.17 Examiner report p.12 Open in the tool

AS Paper 2, June 2023, Q4(a)OptionalExplain8 marks

Two countries each produce two products and wish to trade with each other. Explain the difference between the principles of absolute advantage and comparative advantage and consider whether the principle of comparative advantage is always the more important influence when each country is deciding whether to trade with each other.

Question paper p.5 Mark scheme p.17 Examiner report p.11 Open in the tool

Data response questions on the reasons for international trade

AS Paper 2, November 2025, Q1(e)Assess6 marks

Case study: How do we make sure cocoa bean farmers get paid a living wage?

Assess the advantages and disadvantages of Ivory Coast continuing to specialise in the production and export of cocoa beans.

Question paper p.3 Mark scheme p.13 Open in the tool

AS Paper 2, June 2025, Q1(d)Assess6 marks

Case study: Can South Africa escape from its economic difficulties?

Assess the extent to which closer membership of the AfCFTA may help South Africa to achieve the growth needed to ‘escape from its economic difficulties’.

Question paper p.3 Mark scheme p.10 Open in the tool

AS Paper 2, March 2024, Q1(e)Assess6 marks

Case study: Artificial Intelligence

Assess the likely impact of the growth of AI on the specialisation and trade of a country such as Japan.

Question paper p.3 Mark scheme p.9 Open in the tool

Multiple choice questions

AS Paper 1, November 2025, Q27
What will definitely lead to an improvement in the terms of trade?
AS Paper 1, June 2025, Q28
Which formula is used to calculate the terms of trade?
AS Paper 1, March 2025, Q26
Country X trades with country Y. What are the terms of trade for country X?
AS Paper 1, March 2025, Q29
The diagram shows the production possibilities for barley and wheat in countries Q and R. What can be concluded?
AS Paper 1, November 2024, Q27
The table shows the average price of exports and imports. Which combination of changes in export prices and import prices could result in a country’s terms of trade increasing from 100 to 110?
AS Paper 1, June 2024, Q27
The diagram shows the amounts of cotton and butter that can be produced in countries X and Y with a given quantity of resources. What can be concluded from the diagram?
AS Paper 1, June 2024, Q28
What is indicated by an economy’s terms of trade?
AS Paper 1, March 2024, Q24
The table indicates the factor inputs required to produce wheat and cars in countries X and Y. What makes it possible for both countries to benefit from trade?
AS Paper 1, March 2024, Q26
When must the terms of trade of a country change?
AS Paper 1, November 2023, Q18
What must be the result for a country of a rise in its export prices relative to its import prices?
AS Paper 1, November 2023, Q19
Country X can produce a product at a lower opportunity cost than country Y. Which term best describes this statement?
AS Paper 1, June 2023, Q25
What will definitely change a country’s terms of trade?
AS Paper 1, June 2023, Q26
The world consists of two countries, M and N. The graphs show their production possibilities for wheat and rice. Countries M and N operate on their production possibility curves and, before specialisation, country M produces 60 units of…
AS Paper 1, March 2023, Q24
What can be best understood from a knowledge of a country’s terms of trade?

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Essay questions on the reasons for international trade

Data response questions on the reasons for international trade

Multiple choice questions

More Cambridge International (CAIE) topics: 6 International economic issues (AS)