Question 1

A customs union is a trade agreement:

Accepted Answer

A) in which member countries are free to set their separate tariffs on other countries. 
B) in which members agree to set similar tariffs on nonmembers. 
C) in which resources are free to move between member countries. 
D) in which member countries have common currency. 
A) in which member countries are free to set their separate tariffs on other countries. 
B) in which members agree to set similar tariffs on nonmembers. 
C) in which resources are free to move between member countries. 
D) in which member countries have common currency.

Question 2

The U.S.sugar quota sometimes causes the U.S.domestic price
of sugar to be twice as high as the world price.How does the
sugar quota affect the U.S.price of corn and the U.S.
environment?

Accepted Answer

One demand for imported sugar cane origi

Question 3

Which of the following represents the stage where economic
Integration is LEAST complete?

Accepted Answer

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

Question 4

What type of spillovers do the United States and the European
Union governments believe are associated with their domestic
Solar panel production?

Accepted Answer

A) consumption spillovers 
B) heating spillovers 
C) electricity spillovers 
D) knowledge spillovers 
A) consumption spillovers 
B) heating spillovers 
C) electricity spillovers 
D) knowledge spillovers

Question 5

The WTO also ruled on the U.S.restriction of gasoline imports
From Venezuela and Brazil in 1994 on environmental grounds.
What was the outcome?

Accepted Answer

A) The United States could ban those imports because they violated the U.S.Clean Air Act. 
B) They could not ban the imports because they had not given Venezuela and Brazil a grace period as they had given their own
u.S.companies. 
C) The United States could not use "environmental protection" as an excuse for every trade dispute that came along. 
D) The United States could bring counter­charges against Venezuela and Brazil on the banana issue. 
A) The United States could ban those imports because they violated the U.S.Clean Air Act. 
B) They could not ban the imports because they had not given Venezuela and Brazil a grace period as they had given their own
u.S.companies. 
C) The United States could not use "environmental protection" as an excuse for every trade dispute that came along. 
D) The United States could bring counter­charges against Venezuela and Brazil on the banana issue.

Question 6

(Figure: U.S.Imports from Mexico and Asia) If the United States
Forms a customs union with Mexico, it will result in a(n) _______
In producer surplus of ______ for Mexico.

Accepted Answer

A) increase; $25,000 
B) increase; $50,000 
C) increase; $32,500 
D) decrease; $50,000 
A) increase; $25,000 
B) increase; $50,000 
C) increase; $32,500 
D) decrease; $50,000

Question 7

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) For the United States, are there
Trade diversion losses, trade creation gains, or both as a result of
The formation of NAFTA?

Accepted Answer

A) There are only trade diversions losses 
B) There are only trade creation gains. 
C) There are neither trade creation gains nor trade diversion losses. 
D) There are both trade creation gains and trade diversion losses. 
A) There are only trade diversions losses 
B) There are only trade creation gains. 
C) There are neither trade creation gains nor trade diversion losses. 
D) There are both trade creation gains and trade diversion losses.

Question 8

When a large nation imposes a tariff, which of the following is
NOT a cost incurred?

Accepted Answer

A) deadweight efficiency loss 
B) reduced consumer surplus 
C) deterioration of terms of trade for the trading partners 
D) falling government revenues for the nation imposing the tariff 
A) deadweight efficiency loss 
B) reduced consumer surplus 
C) deterioration of terms of trade for the trading partners 
D) falling government revenues for the nation imposing the tariff

Question 9

In the case of global pollution, a nation that pollutes gets benefit
From production but:

Accepted Answer

A) has to pay for it in terms of dirty air and water. 
B) never receives any negative consequences. 
C) cannot control the amount of pollution by private firms. 
D) will not suffer the full costs of its own pollution and so has little incentive to control it. 
A) has to pay for it in terms of dirty air and water. 
B) never receives any negative consequences. 
C) cannot control the amount of pollution by private firms. 
D) will not suffer the full costs of its own pollution and so has little incentive to control it.

Question 10

As a result, India fears that some of its:

Accepted Answer

A) exports to China will be diverted to ASEAN countries. 
B) exports to the United States will be diverted to China. 
C) exports to China and to ASEAN countries will be diverted to trade among members of the China­ASEAN free­trade area. 
D) imports from ASEAN countries will be diverted to China. 
A) exports to China will be diverted to ASEAN countries. 
B) exports to the United States will be diverted to China. 
C) exports to China and to ASEAN countries will be diverted to trade among members of the China­ASEAN free­trade area. 
D) imports from ASEAN countries will be diverted to China.

Question 11

Why did the United States suspend its preferential trade
Treatment for Bangladesh in 2013?

Accepted Answer

A) The United States wanted to collect more tariff revenue on all imports from Bangladesh. 
B) The United States wanted to punish Bangladesh for its poor labor practices. 
C) The United States wanted to collect more tariff revenue on imports other than garments from Bangladesh 
D) The United States wanted to force Bangladesh to join NAFTA. 
A) The United States wanted to collect more tariff revenue on all imports from Bangladesh. 
B) The United States wanted to punish Bangladesh for its poor labor practices. 
C) The United States wanted to collect more tariff revenue on imports other than garments from Bangladesh 
D) The United States wanted to force Bangladesh to join NAFTA.

Question 12

Suppose that there is a negative externality associated with
Alcohol consumption in the United States (e.g., costs of publicly
Funded alcoholism treatment centers).What will happen to the
Social costs of this externality if the United States eliminates all
Tariffs on alcohol imports?

Accepted Answer

A) The social coasts will increase. 
B) They will not change. 
C) They will decrease. 
D) The social costs will increase but be offset by the private losses associated with increased imports as the tariffs are
Eliminated. 
A) The social coasts will increase. 
B) They will not change. 
C) They will decrease. 
D) The social costs will increase but be offset by the private losses associated with increased imports as the tariffs are
Eliminated.

Question 13

Unlike the Kyoto Protocol, the Copenhagen Accord will:

Accepted Answer

A) include India and China as participants. 
B) strongly curtail emissions. 
C) seek to reverse global warming. 
D) be noncontroversial. 
A) include India and China as participants. 
B) strongly curtail emissions. 
C) seek to reverse global warming. 
D) be noncontroversial.

Question 14

An example of the tragedy of the commons is:

Accepted Answer

A) no worldwide fuel economy standard. 
B) overfishing in international waters. 
C) unsafe fishing practices that trap dolphins and sea turtles. 
D) illegal copyright infringement. 
A) no worldwide fuel economy standard. 
B) overfishing in international waters. 
C) unsafe fishing practices that trap dolphins and sea turtles. 
D) illegal copyright infringement.

Question 15

(Figure: The Home and World Markets) Using the graphs, the
Amount imported by the home market under free trade is:

Accepted Answer

A) 20. 
B) 40. 
C) 60. 
D) 80. 
A) 20. 
B) 40. 
C) 60. 
D) 80.

Question 16

Suppose country X currently produces widgets.Then it
Establishes a preferential trading agreement with country Y.
Following the formation of the PTA, country X no longer produces
Widgets and imports widgets from country Y.What has occurred?

Accepted Answer

A) There is trade diversion and a welfare gain for both country X and country Y. 
B) There is trade diversion, a welfare gain for country Y, and a welfare loss for country X. 
C) There is trade creation and a welfare gain for both country X and country Y. 
D) There is trade creation, a welfare gain for country Y, and a welfare loss for country X. 
A) There is trade diversion and a welfare gain for both country X and country Y. 
B) There is trade diversion, a welfare gain for country Y, and a welfare loss for country X. 
C) There is trade creation and a welfare gain for both country X and country Y. 
D) There is trade creation, a welfare gain for country Y, and a welfare loss for country X.

Question 17

Which of the following statements explains why trading partners
Are often concerned about each other's labor standards?
I.From a humanitarian perspective, people do not want to buy
Products if workers are in oppressive conditions.
II.Unions realize that low standards for labor will be less costly,
And those products will compete more effectively with products
Produced at home.
III, Some nations do not enforce their own lax labor standards,
But have also signed on to trade agreements.

Accepted Answer

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

Question 18

A case study of NAFTA, with regard to the benefits for Canada
From U.S.trade, found that:

Accepted Answer

A) Canada was not able to increase its exports due to barriers still remaining. 
B) Canada had modest gains but was harmed by immigration into the United States from Mexico. 
C) Canada had more trade diversion than trade creation and so was harmed overall. 
D) Canada had more trade creation than trade diversion and so benefited overall. 
A) Canada was not able to increase its exports due to barriers still remaining. 
B) Canada had modest gains but was harmed by immigration into the United States from Mexico. 
C) Canada had more trade diversion than trade creation and so was harmed overall. 
D) Canada had more trade creation than trade diversion and so benefited overall.

Question 19

Which of the following was an important reason why the United
States did NOT sign the Kyoto Protocol?

Accepted Answer

A) It believed that exemptions for some of its major developing­ country trading partners (such as China and India) were unfair. 
B) It believed that Europe's targets were set ridiculously low. 
C) It believed that pollution does not cause global warming. 
D) It believed that targets for some of its major developing­ country trading partners (such as China and India) were too low. 
A) It believed that exemptions for some of its major developing­ country trading partners (such as China and India) were unfair. 
B) It believed that Europe's targets were set ridiculously low. 
C) It believed that pollution does not cause global warming. 
D) It believed that targets for some of its major developing­ country trading partners (such as China and India) were too low.

Question 20

A prisoner's dilemma exists for global pollutants because:

Accepted Answer

A) countries do not face the full cost of pollution that they generate. 
B) countries that regulate pollution gain more than countries that do not regulate pollution. 
C) countries that regulate pollution lose more than countries that do not regulate pollution. 
D) no country follows international agreements to limit pollution. 
A) countries do not face the full cost of pollution that they generate. 
B) countries that regulate pollution gain more than countries that do not regulate pollution. 
C) countries that regulate pollution lose more than countries that do not regulate pollution. 
D) no country follows international agreements to limit pollution.

A customs union is a trade agreement:

The U.S.sugar quota sometimes causes the U.S.domestic price of sugar to be twice as high as the world price.How does the sugar quota affect the U.S.price of corn and the U.S. environment?

Which of the following represents the stage where economic Integration is LEAST complete?

What type of spillovers do the United States and the European Union governments believe are associated with their domestic Solar panel production?

The WTO also ruled on the U.S.restriction of gasoline imports From Venezuela and Brazil in 1994 on environmental grounds. What was the outcome?

(Figure: U.S.Imports from Mexico and Asia) If the United States Forms a customs union with Mexico, it will result in a(n) _ In producer surplus of for Mexico.

When a large nation imposes a tariff, which of the following is NOT a cost incurred?

In the case of global pollution, a nation that pollutes gets benefit From production but:

As a result, India fears that some of its:

Why did the United States suspend its preferential trade Treatment for Bangladesh in 2013?

Suppose that there is a negative externality associated with Alcohol consumption in the United States (e.g., costs of publicly Funded alcoholism treatment centers).What will happen to the Social costs of this externality if the United States eliminates all Tariffs on alcohol imports?

Unlike the Kyoto Protocol, the Copenhagen Accord will:

An example of the tragedy of the commons is:

(Figure: The Home and World Markets) Using the graphs, the Amount imported by the home market under free trade is:

Suppose country X currently produces widgets.Then it Establishes a preferential trading agreement with country Y. Following the formation of the PTA, country X no longer produces Widgets and imports widgets from country Y.What has occurred?

A case study of NAFTA, with regard to the benefits for Canada From U.S.trade, found that:

Which of the following was an important reason why the United States did NOT sign the Kyoto Protocol?

A prisoner's dilemma exists for global pollutants because:

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

A customs union is a trade agreement:

The U.S.sugar quota sometimes causes the U.S.domestic price of sugar to be twice as high as the world price.How does the sugar quota affect the U.S.price of corn and the U.S. environment?

Which of the following represents the stage where economic Integration is LEAST complete?

What type of spillovers do the United States and the European Union governments believe are associated with their domestic Solar panel production?

The WTO also ruled on the U.S.restriction of gasoline imports From Venezuela and Brazil in 1994 on environmental grounds. What was the outcome?

(Figure: U.S.Imports from Mexico and Asia) If the United States Forms a customs union with Mexico, it will result in a(n) _______ In producer surplus of ______ for Mexico.

When a large nation imposes a tariff, which of the following is NOT a cost incurred?

In the case of global pollution, a nation that pollutes gets benefit From production but:

As a result, India fears that some of its:

Why did the United States suspend its preferential trade Treatment for Bangladesh in 2013?

Suppose that there is a negative externality associated with Alcohol consumption in the United States (e.g., costs of publicly Funded alcoholism treatment centers).What will happen to the Social costs of this externality if the United States eliminates all Tariffs on alcohol imports?

Unlike the Kyoto Protocol, the Copenhagen Accord will:

An example of the tragedy of the commons is:

(Figure: The Home and World Markets) Using the graphs, the Amount imported by the home market under free trade is:

Suppose country X currently produces widgets.Then it Establishes a preferential trading agreement with country Y. Following the formation of the PTA, country X no longer produces Widgets and imports widgets from country Y.What has occurred?

A case study of NAFTA, with regard to the benefits for Canada From U.S.trade, found that:

Which of the following was an important reason why the United States did NOT sign the Kyoto Protocol?

A prisoner's dilemma exists for global pollutants because:

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

(Figure: U.S.Imports from Mexico and Asia) If the United States Forms a customs union with Mexico, it will result in a(n) _ In producer surplus of for Mexico.