Question 1

A reason why it is difficult for producers to maintain a cartel is that:

Accepted Answer

A)  The elasticity of demand for the cartel's output decreases over time 
B)  Producers in the cartel have the economic incentive to cheat 
C)  Economic profits discourage other producers from entering the industry 
D)  Producers in the cartel have the motivation to lower price but not to raise price 
A)  The elasticity of demand for the cartel's output decreases over time 
B)  Producers in the cartel have the economic incentive to cheat 
C)  Economic profits discourage other producers from entering the industry 
D)  Producers in the cartel have the motivation to lower price but not to raise price

Question 2

When the North American Free Trade Agreement was being considered,American critics argued that it would likely result in

Accepted Answer

A)  a reduction in U.S.competitiveness against Canada 
B)  a loss of American jobs to Mexico 
C)  a gain in U.S.competitiveness against Mexico 
D)  additional jobs for unskilled workers in the United States 
A)  a reduction in U.S.competitiveness against Canada 
B)  a loss of American jobs to Mexico 
C)  a gain in U.S.competitiveness against Mexico 
D)  additional jobs for unskilled workers in the United States

Question 3

Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic,but changes in supply induce relatively wide fluctuations in price when demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 4

Advocates of the North American Free Trade Agreement (NAFTA) hoped that a (an) ______ in Mexican exports would ______ the migration of labor from Mexico to the United States.

Accepted Answer

A)  increase,increase 
B)  increase,decrease 
C)  decrease,increase 
D)  decrease,decrease 
A)  increase,increase 
B)  increase,decrease 
C)  decrease,increase 
D)  decrease,decrease

Question 5

Figure 7.3.World Oil Market
  
-Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

Accepted Answer

A)  Profits totaling $280 
B)  Profits totaling $360 
C)  Losses totaling $140 
D)  Losses totaling $180 
A)  Profits totaling $280 
B)  Profits totaling $360 
C)  Losses totaling $140 
D)  Losses totaling $180

Question 6

U.S.labor unions argued against the North American Free Trade Agreement on the grounds that it would result in U.S.companies relocating in Mexico in order to take advantage of lower wage rates.

Accepted Answer

A) True 
 B)False

Question 7

As new regional trading arrangements are formed,the opportunity cost of remaining outside:

Accepted Answer

A)  increases 
B)  decreases 
C)  remains stable 
D)  none of these 
A)  increases 
B)  decreases 
C)  remains stable 
D)  none of these

Question 8

When Western European democracies removed trade barriers and began to form the European Community,one of their hopes was that their economic and financial ties would bind them together so that it would not be in their interest to go to war again.

Accepted Answer

A) True 
 B)False

Question 9

In terms of static economic analysis,if a customs union results in a small amount of trade creation relative to trade diversion,world welfare

Accepted Answer

A)  increases 
B)  decreases 
C)  does not change 
A)  increases 
B)  decreases 
C)  does not change

Question 10

Which device has the European Union used to equalize farm-product import prices with politically determined European Union prices,regardless of shifts in world prices?

Accepted Answer

A)  Variable levies 
B)  Import quotas 
C)  Import subsidies 
D)  Domestic content regulations 
A)  Variable levies 
B)  Import quotas 
C)  Import subsidies 
D)  Domestic content regulations

Question 11

Regarding stages of economic integration,a free trade area

Accepted Answer

A)  goes beyond a customs union by including a common external tariff 
B)  falls short of a customs union by excluding a common external tariff 
C)  goes beyond a common market by including a common transportation policy 
D)  goes beyond a common market by including a common agricultural policy 
A)  goes beyond a customs union by including a common external tariff 
B)  falls short of a customs union by excluding a common external tariff 
C)  goes beyond a common market by including a common transportation policy 
D)  goes beyond a common market by including a common agricultural policy

Question 12

Before joining the NAFTA in 1994,Mexico adopted essentially a free-trade policy toward Canada and the United States.

Accepted Answer

A) True 
 B)False

Question 13

Concerning the stages of economic integration,by the early 1990s,the European Union had essentially reached the stage of a (an)

Accepted Answer

A)  free trade area 
B)  customs union 
C)  common market 
D)  economic union 
A)  free trade area 
B)  customs union 
C)  common market 
D)  economic union

Question 14

With a preferential trading arrangement,a group of countries agrees to unilaterally reduce tariffs applied to imports from all countries of the world.

Accepted Answer

A) True 
 B)False

Question 15

At the Maastricht Summit of 1991,members of the European Union expressed the goal of achieving the common market stage of economic integration.

Accepted Answer

A) True 
 B)False

Question 16

The common agricultural policy of the European Union has:

Accepted Answer

A)  Increased American farm exports to the EU 
B)  Decreased American farm exports to the EU 
C)  Lowered the price of American farm exports to the EU 
D)  Not affected the price of American farm exports to the EU 
A)  Increased American farm exports to the EU 
B)  Decreased American farm exports to the EU 
C)  Lowered the price of American farm exports to the EU 
D)  Not affected the price of American farm exports to the EU

Question 17

Of the manufactured goods exported by developing countries,most of them are ______ and include ______ of technology in their production

Accepted Answer

A)  labor intensive,modest amounts 
B)  labor intensive,large amounts 
C)  capital intensive,modest amounts 
D)  capital intensive,large amounts 
A)  labor intensive,modest amounts 
B)  labor intensive,large amounts 
C)  capital intensive,modest amounts 
D)  capital intensive,large amounts

Question 18

All welfare consequences of a regional trading arrangement are dynamic

Accepted Answer

A) True 
 B)False

Question 19

The figure below depicts the steel market for Portugal,a small nation that is unable to affect the world price.Assume that Germany and France can supply steel to Portugal at a price of $200 and $300 respectively.
Figure 8.2.Portugal's Steel Market
  
-Consider Figure 8.2.As a result of a customs union formed with France,Portugal's overall welfare rises by $900.

Accepted Answer

A) True 
 B)False

Question 20

If the demand for coffee is price inelastic,an increase in the supply of coffee leads to falling prices and rising sales revenues.

Accepted Answer

A) True 
 B)False

A reason why it is difficult for producers to maintain a cartel is that:

When the North American Free Trade Agreement was being considered,American critics argued that it would likely result in

Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic,but changes in supply induce relatively wide fluctuations in price when demand is inelastic.

Advocates of the North American Free Trade Agreement (NAFTA) hoped that a (an) in Mexican exports would the migration of labor from Mexico to the United States.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

U.S.labor unions argued against the North American Free Trade Agreement on the grounds that it would result in U.S.companies relocating in Mexico in order to take advantage of lower wage rates.

As new regional trading arrangements are formed,the opportunity cost of remaining outside:

When Western European democracies removed trade barriers and began to form the European Community,one of their hopes was that their economic and financial ties would bind them together so that it would not be in their interest to go to war again.

In terms of static economic analysis,if a customs union results in a small amount of trade creation relative to trade diversion,world welfare

Which device has the European Union used to equalize farm-product import prices with politically determined European Union prices,regardless of shifts in world prices?

Regarding stages of economic integration,a free trade area

Before joining the NAFTA in 1994,Mexico adopted essentially a free-trade policy toward Canada and the United States.

Concerning the stages of economic integration,by the early 1990s,the European Union had essentially reached the stage of a (an)

With a preferential trading arrangement,a group of countries agrees to unilaterally reduce tariffs applied to imports from all countries of the world.

At the Maastricht Summit of 1991,members of the European Union expressed the goal of achieving the common market stage of economic integration.

The common agricultural policy of the European Union has:

Of the manufactured goods exported by developing countries,most of them are and include of technology in their production

All welfare consequences of a regional trading arrangement are dynamic

If the demand for coffee is price inelastic,an increase in the supply of coffee leads to falling prices and rising sales revenues.

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 7: Trade Policies for the Developing Nations

A reason why it is difficult for producers to maintain a cartel is that:

When the North American Free Trade Agreement was being considered,American critics argued that it would likely result in

Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic,but changes in supply induce relatively wide fluctuations in price when demand is inelastic.

Advocates of the North American Free Trade Agreement (NAFTA) hoped that a (an) ______ in Mexican exports would ______ the migration of labor from Mexico to the United States.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under a profit-maximizing cartel,producers realize:

U.S.labor unions argued against the North American Free Trade Agreement on the grounds that it would result in U.S.companies relocating in Mexico in order to take advantage of lower wage rates.

As new regional trading arrangements are formed,the opportunity cost of remaining outside:

When Western European democracies removed trade barriers and began to form the European Community,one of their hopes was that their economic and financial ties would bind them together so that it would not be in their interest to go to war again.

In terms of static economic analysis,if a customs union results in a small amount of trade creation relative to trade diversion,world welfare

Which device has the European Union used to equalize farm-product import prices with politically determined European Union prices,regardless of shifts in world prices?

Regarding stages of economic integration,a free trade area

Before joining the NAFTA in 1994,Mexico adopted essentially a free-trade policy toward Canada and the United States.

Concerning the stages of economic integration,by the early 1990s,the European Union had essentially reached the stage of a (an)

With a preferential trading arrangement,a group of countries agrees to unilaterally reduce tariffs applied to imports from all countries of the world.

At the Maastricht Summit of 1991,members of the European Union expressed the goal of achieving the common market stage of economic integration.

The common agricultural policy of the European Union has:

Of the manufactured goods exported by developing countries,most of them are ______ and include ______ of technology in their production

All welfare consequences of a regional trading arrangement are dynamic

If the demand for coffee is price inelastic,an increase in the supply of coffee leads to falling prices and rising sales revenues.

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Advocates of the North American Free Trade Agreement (NAFTA) hoped that a (an) in Mexican exports would the migration of labor from Mexico to the United States.

Of the manufactured goods exported by developing countries,most of them are and include of technology in their production