Question 1

What is the "most favored nation" principle of the WTO?

Accepted Answer

A) Trading partners may choose a favorite nation to trade with. 
B) Any nation can refuse to trade with another that is not its most favored nation. 
C) The WTO has the right to choose the nation that has performed best within the WTO guidelines as its most favored
Nation. 
D) Every nation must grant the same rights and treatment to other nations in the WTO as its "most favored nation." 
A) Trading partners may choose a favorite nation to trade with. 
B) Any nation can refuse to trade with another that is not its most favored nation. 
C) The WTO has the right to choose the nation that has performed best within the WTO guidelines as its most favored
Nation. 
D) Every nation must grant the same rights and treatment to other nations in the WTO as its "most favored nation."

Question 2

It can be shown that the Nash equilibrium would indicate that
Without any agreements, the best outcome for each large nation
Would be to:

Accepted Answer

A) not impose a tariff. 
B) impose a tariff. 
C) find other ways to reward their domestic firms. 
D) impose a consumption tax. 
A) not impose a tariff. 
B) impose a tariff. 
C) find other ways to reward their domestic firms. 
D) impose a consumption tax.

Question 3

Why do some say labor standards are "disguised protection"?

Accepted Answer

A) These standards favor the nations that already have high labor standards and eliminate competition from nations who do
not. 
B) Nations with low labor standards often disguise the fact. 
C) Raising labor standards is not the issue-it is disguised by the fact that shoddy materials are used in production. 
D) Often children who should be in school work anyway, and their participation is "disguised" as if an adult held the job. 
A) These standards favor the nations that already have high labor standards and eliminate competition from nations who do
not. 
B) Nations with low labor standards often disguise the fact. 
C) Raising labor standards is not the issue-it is disguised by the fact that shoddy materials are used in production. 
D) Often children who should be in school work anyway, and their participation is "disguised" as if an adult held the job.

Question 4

In which of the following forms of regional trading agreement are
Rules of origin required?

Accepted Answer

A) a free­trade area 
B) a customs union 
C) a common market 
D) an economic union 
A) a free­trade area 
B) a customs union 
C) a common market 
D) an economic union

Question 5

Which of the following is(are) the effect(s) of an international
Trade agreement that provides an incentive and reward for
Nations NOT to impose tariffs?
I.an increase in world welfare and standard of living
II.an opportunity for low­income nations to exploit the gains
From trade.
III.an opportunity for large countries to improve their terms of
Trade

Accepted Answer

A) I 
B) I and II 
C) I and III 
D) I, II, and III 
A) I 
B) I and II 
C) I and III 
D) I, II, and III

Question 6

Overharvesting of fish in international waters an example of
What economic concept?

Accepted Answer

A) a production externality 
B) a consumption externality 
C) marginal social benefits exceeding marginal private benefits 
D) private marginal costs exceeding marginal social costs 
A) a production externality 
B) a consumption externality 
C) marginal social benefits exceeding marginal private benefits 
D) private marginal costs exceeding marginal social costs

Question 7

The World Trade Organization is called _______________
Because it involves many, if not most, of the nations in the world.

Accepted Answer

A) a bilateral trade organization 
B) a trilateral trade organization 
C) a multilateral trade agreement 
D) a quasi­political trade organization 
A) a bilateral trade organization 
B) a trilateral trade organization 
C) a multilateral trade agreement 
D) a quasi­political trade organization

Question 8

A customs union is:

Accepted Answer

A) a group of countries that agrees there will be "no rules" about trade-anything goes. 
B) a group of countries that agrees to eliminate customs fees and containerized shipping charges on goods traded among
Them. 
C) a group of countries agreeing to eliminate barriers to trade between themselves but keeping tariffs in place against the rest
Of the world. 
D) a group of countries that eliminates trade barriers among themselves and erects a common tariff against all other nations. 
A) a group of countries that agrees there will be "no rules" about trade-anything goes. 
B) a group of countries that agrees to eliminate customs fees and containerized shipping charges on goods traded among
Them. 
C) a group of countries agreeing to eliminate barriers to trade between themselves but keeping tariffs in place against the rest
Of the world. 
D) a group of countries that eliminates trade barriers among themselves and erects a common tariff against all other nations.

Question 9

Which of the following is associated with increased use of solar
Panels?

Accepted Answer

A) negative production externalities 
B) positive production externalities 
C) negative consumption externalities 
D) positive consumption externalities 
A) negative production externalities 
B) positive production externalities 
C) negative consumption externalities 
D) positive consumption externalities

Question 10

SCENARIO: ELECTRIC FAN TRADE
u.S.firms can produce and sell electric fans for $25.The United
States can also import electric fans from China at $40 each and
From Canada at $45 each.Electric fans made in the United
States, China, and Canada are identical.Currently, the United
States imposes a 30% tariff on imported electric fans.
Reference: Ref 11­2
(Scenario: Electric Fan Trade) Now suppose that the United
States forms a free­trade area (NAFTA) with Canada and Mexico.
From which country will the United States import fans?

Accepted Answer

A) China 
B) Canada 
C) It will import fans from neither China nor Canada. 
D) It will import fans from both China and Canada. 
A) China 
B) Canada 
C) It will import fans from neither China nor Canada. 
D) It will import fans from both China and Canada.

Question 11

Under NAFTA, labor disputes and issues will be dealt with by the:

Accepted Answer

A) U.S.Department of Labor. 
B) North American Agreement on Labor Cooperation. 
C) National Labor Relations Board. 
D) U.S.Department of Justice. 
A) U.S.Department of Labor. 
B) North American Agreement on Labor Cooperation. 
C) National Labor Relations Board. 
D) U.S.Department of Justice.

Question 12

Which of the following statements about the European Union (EU)
Is CORRECT?

Accepted Answer

A) EU member countries maintain separate tariff schedules. 
B) There is free trade among EU member countries. 
C) All EU member countries use a common currency (the euro). 
D) All EU member countries have eliminated tariffs on imports from non­EU member countries. 
A) EU member countries maintain separate tariff schedules. 
B) There is free trade among EU member countries. 
C) All EU member countries use a common currency (the euro). 
D) All EU member countries have eliminated tariffs on imports from non­EU member countries.

Question 13

Suppose initially there is no customs union and that the $100
Tariff is imposed by the United States.Now, Mexico invests in
Productive technology and it shifts the Mexican supply curve to
SMex.The United States now forms a customs union with Mexico.
This will result in a price of _______ and imports of _______.

Accepted Answer

A) $250; 500 
B) $250; 400 
C) $150; 600 
D) $150; 500 
A) $250; 500 
B) $250; 400 
C) $150; 600 
D) $150; 500

Question 14

Of the following, which is NOT a regional trade agreement?

Accepted Answer

A) the World Trade Organization 
B) the European Union 
C) the North American Free Trade Agreement 
D) the Central American Free Trade Agreement 
A) the World Trade Organization 
B) the European Union 
C) the North American Free Trade Agreement 
D) the Central American Free Trade Agreement

Question 15

The VER between the United States and Japan was shown to
_______________ gas consumption, _______________ the use
Of energy, and _______________ gas mileage from
Automobiles.

Accepted Answer

A) raise; raise; lower 
B) lower; lower; raise 
C) raise; lower; lower 
D) lower; raise; raise 
A) raise; raise; lower 
B) lower; lower; raise 
C) raise; lower; lower 
D) lower; raise; raise

Question 16

A customs union will increase the welfare of its members and the
Rest of the world if:

Accepted Answer

A) trade creation is greater than trade diversion. 
B) trade creation is less than trade diversion. 
C) trade creation is positive. 
D) trade diversion is positive. 
A) trade creation is greater than trade diversion. 
B) trade creation is less than trade diversion. 
C) trade creation is positive. 
D) trade diversion is positive.

Question 17

India is not a member of the China­ASEAN (Association of South

Accepted Answer

East Asian Nations)

Question 18

The story about the mass slaughter of buffalo in the United
States, which allowed the products to be exported during the
1870s, is an example of:

Accepted Answer

A) the first­mover principle. 
B) the principle of comparative advantage. 
C) the tragedy of the commons. 
D) export subsidies. 
A) the first­mover principle. 
B) the principle of comparative advantage. 
C) the tragedy of the commons. 
D) export subsidies.

Question 19

The fundamental cause of the tragedy of the commons is:

Accepted Answer

A) international trade. 
B) lack of defined property rights. 
C) ignorance. 
D) tariffs. 
A) international trade. 
B) lack of defined property rights. 
C) ignorance. 
D) tariffs.

Question 20

Which of the following regional trade agreements is a free­trade
Area?

Accepted Answer

A) NAFTA 
B) the European Union 
C) Mercosur 
D) NATO 
A) NAFTA 
B) the European Union 
C) Mercosur 
D) NATO

What is the "most favored nation" principle of the WTO?

It can be shown that the Nash equilibrium would indicate that Without any agreements, the best outcome for each large nation Would be to:

Why do some say labor standards are "disguised protection"?

In which of the following forms of regional trading agreement are Rules of origin required?

Overharvesting of fish in international waters an example of What economic concept?

The World Trade Organization is called _______________ Because it involves many, if not most, of the nations in the world.

A customs union is:

Which of the following is associated with increased use of solar Panels?

Under NAFTA, labor disputes and issues will be dealt with by the:

Which of the following statements about the European Union (EU) Is CORRECT?

Suppose initially there is no customs union and that the $100 Tariff is imposed by the United States.Now, Mexico invests in Productive technology and it shifts the Mexican supply curve to SMex.The United States now forms a customs union with Mexico. This will result in a price of _ and imports of _.

Of the following, which is NOT a regional trade agreement?

The VER between the United States and Japan was shown to _______ gas consumption, _ the use Of energy, and _________ gas mileage from Automobiles.

A customs union will increase the welfare of its members and the Rest of the world if:

India is not a member of the ChinaASEAN (Association of South

The story about the mass slaughter of buffalo in the United States, which allowed the products to be exported during the 1870s, is an example of:

The fundamental cause of the tragedy of the commons is:

Which of the following regional trade agreements is a freetrade Area?

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Filters

Exam 11: Exchange Rates I: the Monetary Approach in the Long Run

What is the "most favored nation" principle of the WTO?

It can be shown that the Nash equilibrium would indicate that Without any agreements, the best outcome for each large nation Would be to:

Why do some say labor standards are "disguised protection"?

In which of the following forms of regional trading agreement are Rules of origin required?

Overharvesting of fish in international waters an example of What economic concept?

The World Trade Organization is called _______________ Because it involves many, if not most, of the nations in the world.

A customs union is:

Which of the following is associated with increased use of solar Panels?

Under NAFTA, labor disputes and issues will be dealt with by the:

Which of the following statements about the European Union (EU) Is CORRECT?

Of the following, which is NOT a regional trade agreement?

The VER between the United States and Japan was shown to _______________ gas consumption, _______________ the use Of energy, and _______________ gas mileage from Automobiles.

A customs union will increase the welfare of its members and the Rest of the world if:

India is not a member of the China­ASEAN (Association of South

The story about the mass slaughter of buffalo in the United States, which allowed the products to be exported during the 1870s, is an example of:

The fundamental cause of the tragedy of the commons is:

Which of the following regional trade agreements is a free­trade Area?

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Increasing Returns to Scale and Monopolistic Competition

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Filters

The VER between the United States and Japan was shown to _______ gas consumption, _ the use Of energy, and _________ gas mileage from Automobiles.

India is not a member of the ChinaASEAN (Association of South

Which of the following regional trade agreements is a freetrade Area?