Question 1

Where was the Climate Summit held in December 2009?

Accepted Answer

A) Brussels 
B) New York 
C) Seattle 
D) Copenhagen 
A) Brussels 
B) New York 
C) Seattle 
D) Copenhagen

Question 2

Suppose that a large country imposes optimal tariffs on imports
From another large country.The second country then responds
With optimal tariffs on imports from the first country.For these
Two countries, the Nash equilibrium results in ___________ for
The first country and __________ for the second country.

Accepted Answer

A) losses; losses 
B) gains; gains 
C) losses; gains 
D) gains; losses 
A) losses; losses 
B) gains; gains 
C) losses; gains 
D) gains; losses

Question 3

During which round of negotiations did the WTO toughen its
Stance against domestic policies that limit trade?

Accepted Answer

A) Bretton Woods 
B) Uruguay 
C) Doha 
D) The WTO never toughened its stance against domestic policies. 
A) Bretton Woods 
B) Uruguay 
C) Doha 
D) The WTO never toughened its stance against domestic policies.

Question 4

Suppose that the following graph gives the U.S.supply (S) of and demand (D) for
auto parts (say steering wheels).U.S.automakers can also import steering wheels
from Mexico at $50 each and from Japan at $40 each.Currently, there is a 60%
tariff on imported steering wheels.   
A) How many steering wheels will the United States import?
B) How much tariff revenue will the U.S.government collect?
C) Suppose that the United States and Mexico become part of NAFTA and there is
free trade between the two countries.Now how many steering wheels will the
United States import?
D) Calculate the trade creation gains from free trade in steering wheels with
Mexico.
E) Calculate the trade diversion losses from free trade in steering wheels with
Mexico.
F) Does the United States gain or lose as a result of free trade in steering wheels
with Mexico?

Accepted Answer

A) 50
B) 60%($40 × 50) = $1,200
C) 150
D

Question 5

If a regional trading agreement causes products from member
Countries to replace imports from nonmember countries, then the
Regional trading agreement will experience:

Accepted Answer

A) economic gains. 
B) trade creation gains. 
C) trade diversion losses. 
D) trade perversion. 
A) economic gains. 
B) trade creation gains. 
C) trade diversion losses. 
D) trade perversion.

Question 6

Why are economists sometimes skeptical about international
Labor standards?

Accepted Answer

A) They are difficult to enforce. 
B) They create more competition for U.S.workers. 
C) GATT does not allow labor standards. 
D) They may be used as a rationale to protect domestic activities that can no longer compete with imports. 
A) They are difficult to enforce. 
B) They create more competition for U.S.workers. 
C) GATT does not allow labor standards. 
D) They may be used as a rationale to protect domestic activities that can no longer compete with imports.

Question 7

In a prisoner's dilemma:

Accepted Answer

A) all competing parties gain. 
B) one competitor gains at the expense of another. 
C) all competing parties lose. 
D) one competitor loses. 
A) all competing parties gain. 
B) one competitor gains at the expense of another. 
C) all competing parties lose. 
D) one competitor loses.

Question 8

A) Why does the United States both import and export ethanol?
B) Suppose that the United States allowed domestic fuel
producers to use ethanol made from any source (i.e., corn or
sugar).What is likely to happen to U.S.production of corn
ethanol and U.S.imports of sugar ethanol?

Accepted Answer

A) U.S.regulations require U.S.fuel comp

Question 9

There is some misunderstanding of the WTO's provisions for
Environmental protection in trade.The WTO actually:

Accepted Answer

A) allows nations to bar all imports from nations that do not conform to their own standards. 
B) provides that nations may enforce any standards for particular products as long as the standards apply equally to
Domestic producers and importers. 
C) does not make any pretense of caring at all about the environment. 
D) is very inconsistent in its rulings. 
A) allows nations to bar all imports from nations that do not conform to their own standards. 
B) provides that nations may enforce any standards for particular products as long as the standards apply equally to
Domestic producers and importers. 
C) does not make any pretense of caring at all about the environment. 
D) is very inconsistent in its rulings.

Question 10

(Table: Demand and Supply for Gloves) The United States can also
Import gloves from China at $4 per pair and from Mexico at $5 per
Pair.Currently, the United States imposes a specific tariff of $2 on its
Glove imports.Suppose that the United States and Mexico form a free­
Trade area.How much trade in gloves is created?

Accepted Answer

A) zero pairs of gloves 
B) 6 pairs of gloves 
C) 2 pairs of gloves 
D) 4 pairs of gloves 
A) zero pairs of gloves 
B) 6 pairs of gloves 
C) 2 pairs of gloves 
D) 4 pairs of gloves

Question 11

Using game theory as an analytical tool, if one large nation
Imposes tariffs, the total cost is small; however, when several
Trading partners do the same:

Accepted Answer

A) the costs are even smaller. 
B) the costs balance out and there is no harm. 
C) the costs are the same but the potential gains are much smaller. 
D) then all nations gain. 
A) the costs are even smaller. 
B) the costs balance out and there is no harm. 
C) the costs are the same but the potential gains are much smaller. 
D) then all nations gain.

Question 12

What complex set of free­trade area regulations prohibits non­
Member country imports to a high­tariff member country via a
Low­tariff member country?

Accepted Answer

A) environmental certification 
B) rules of origin 
C) health and safety standards 
D) a codified trade agreement 
A) environmental certification 
B) rules of origin 
C) health and safety standards 
D) a codified trade agreement

Question 13

Although it has had some criticism for ineffectiveness, in what
Way has the North American Agreement on Labor Cooperation
Had some positive benefits?

Accepted Answer

A) It created an institutional forum for the discussion of labor issues in Canada, the United States, and Mexico 
B) It prohibited any one NAFTA member country from publically revealing violations of labor laws in other NAFTA member
Countries. 
C) It reduced the emphasis on labor rights as a legitimate trade issue 
D) All of these answer choices are examples of the positive benefits. 
A) It created an institutional forum for the discussion of labor issues in Canada, the United States, and Mexico 
B) It prohibited any one NAFTA member country from publically revealing violations of labor laws in other NAFTA member
Countries. 
C) It reduced the emphasis on labor rights as a legitimate trade issue 
D) All of these answer choices are examples of the positive benefits.

Question 14

Which of the following is an example of the tragedy of the
Commons?

Accepted Answer

A) overproduction of Saudi Arabian crude oil 
B) overregulation of the U.S.steel industry 
C) overharvesting of many species of fish 
D) U.S.farm subsidies 
A) overproduction of Saudi Arabian crude oil 
B) overregulation of the U.S.steel industry 
C) overharvesting of many species of fish 
D) U.S.farm subsidies

Question 15

Suppose that the United States allowed its domestic fuel
Producers to use ethanol made from any source (corn or sugar).
What is likely to happen to U.S.production of corn ethanol and
u.S.imports of sugar ethanol?

Accepted Answer

A) U.S.production of corn ethanol would increase, and U.S. imports of sugar ethanol would decrease. 
B) U.S.production of corn ethanol would decrease, and U.S. imports of sugar ethanol would decrease. 
C) U.S.production of corn ethanol would decrease, and U.S. imports of sugar ethanol would increase. 
D) U.S.production of corn ethanol would increase, and U.S. imports of sugar ethanol would increase. 
A) U.S.production of corn ethanol would increase, and U.S. imports of sugar ethanol would decrease. 
B) U.S.production of corn ethanol would decrease, and U.S. imports of sugar ethanol would decrease. 
C) U.S.production of corn ethanol would decrease, and U.S. imports of sugar ethanol would increase. 
D) U.S.production of corn ethanol would increase, and U.S. imports of sugar ethanol would increase.

Question 16

Two large countries are thinking of imposing a tariff on the same
good.
A) What is the best possible outcome for these two large
countries?
B) Is this outcome a Nash equilibrium?

Accepted Answer

A) The best possible outcome is for both

Question 17

Implementing a regional free­trade agreement may have an
Effect in which, due to reduced tariffs, a nation begins to import a
Product from another member country that it had previously
Imported from outside the new trade region.This effect is called:

Accepted Answer

A) trade creation. 
B) trade diversion. 
C) reciprocal trade agreements. 
D) the employment effect of FTAs. 
A) trade creation. 
B) trade diversion. 
C) reciprocal trade agreements. 
D) the employment effect of FTAs.

Question 18

Many regional trade agreements include other provisions that are
Not part of the treaty, but they are add­ons that might be
Important to trade issues.These are called:

Accepted Answer

A) addenda. 
B) side agreements. 
C) environmental pacts. 
D) worker rights documents. 
A) addenda. 
B) side agreements. 
C) environmental pacts. 
D) worker rights documents.

Question 19

Suppose that the U.S.government required firms to pay a living
Wage to workers in their subsidiaries or contracting firms in
Developing countries.As a consequence of this requirement,
Wages would likely _______ to the living wage and employment
Would likely _________.

Accepted Answer

A) rise; increase 
B) fall; increase 
C) rise; decrease 
D) fall; decrease 
A) rise; increase 
B) fall; increase 
C) rise; decrease 
D) fall; decrease

Question 20

SCENARIO: PAYOFF MATRIX
The payoff matrix shows outcomes of various strategies that a
Home and Foreign country can follow to decide to regulate or not
Regulate pollution.The columns give Foreign's actions, and the
Rows give Home's actions.The values in the upper right­hand
Side of each element give Foreign's net benefits; the values in
The lower left­hand side of each element give Home's net
Benefits.Net benefits are the environmental benefits from
Regulation minus costs associated with installing pollution control
Equipment.  
(Scenario: Payoff Matrix) What is likely to happen if there are no
International agreements to limit pollution?

Accepted Answer

A) Foreign will regulate pollution but Home will not. 
B) Home will regulate pollution but Foreign will not. 
C) Neither country will regulate pollution. 
D) Both countries will regulate pollution. 
A) Foreign will regulate pollution but Home will not. 
B) Home will regulate pollution but Foreign will not. 
C) Neither country will regulate pollution. 
D) Both countries will regulate pollution.

Where was the Climate Summit held in December 2009?

Suppose that a large country imposes optimal tariffs on imports From another large country.The second country then responds With optimal tariffs on imports from the first country.For these Two countries, the Nash equilibrium results in _ for The first country and for the second country.

During which round of negotiations did the WTO toughen its Stance against domestic policies that limit trade?

If a regional trading agreement causes products from member Countries to replace imports from nonmember countries, then the Regional trading agreement will experience:

Why are economists sometimes skeptical about international Labor standards?

In a prisoner's dilemma:

A) Why does the United States both import and export ethanol? B) Suppose that the United States allowed domestic fuel producers to use ethanol made from any source (i.e., corn or sugar).What is likely to happen to U.S.production of corn ethanol and U.S.imports of sugar ethanol?

There is some misunderstanding of the WTO's provisions for Environmental protection in trade.The WTO actually:

Using game theory as an analytical tool, if one large nation Imposes tariffs, the total cost is small; however, when several Trading partners do the same:

What complex set of freetrade area regulations prohibits non Member country imports to a hightariff member country via a Lowtariff member country?

Although it has had some criticism for ineffectiveness, in what Way has the North American Agreement on Labor Cooperation Had some positive benefits?

Which of the following is an example of the tragedy of the Commons?

Suppose that the United States allowed its domestic fuel Producers to use ethanol made from any source (corn or sugar). What is likely to happen to U.S.production of corn ethanol and u.S.imports of sugar ethanol?

Two large countries are thinking of imposing a tariff on the same good. A) What is the best possible outcome for these two large countries? B) Is this outcome a Nash equilibrium?

Implementing a regional freetrade agreement may have an Effect in which, due to reduced tariffs, a nation begins to import a Product from another member country that it had previously Imported from outside the new trade region.This effect is called:

Many regional trade agreements include other provisions that are Not part of the treaty, but they are addons that might be Important to trade issues.These are called:

Suppose that the U.S.government required firms to pay a living Wage to workers in their subsidiaries or contracting firms in Developing countries.As a consequence of this requirement, Wages would likely _ to the living wage and employment Would likely ___.

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

Where was the Climate Summit held in December 2009?

During which round of negotiations did the WTO toughen its Stance against domestic policies that limit trade?

If a regional trading agreement causes products from member Countries to replace imports from nonmember countries, then the Regional trading agreement will experience:

Why are economists sometimes skeptical about international Labor standards?

In a prisoner's dilemma:

A) Why does the United States both import and export ethanol? B) Suppose that the United States allowed domestic fuel producers to use ethanol made from any source (i.e., corn or sugar).What is likely to happen to U.S.production of corn ethanol and U.S.imports of sugar ethanol?

There is some misunderstanding of the WTO's provisions for Environmental protection in trade.The WTO actually:

Using game theory as an analytical tool, if one large nation Imposes tariffs, the total cost is small; however, when several Trading partners do the same:

What complex set of free­trade area regulations prohibits non­ Member country imports to a high­tariff member country via a Low­tariff member country?

Although it has had some criticism for ineffectiveness, in what Way has the North American Agreement on Labor Cooperation Had some positive benefits?

Which of the following is an example of the tragedy of the Commons?

Suppose that the United States allowed its domestic fuel Producers to use ethanol made from any source (corn or sugar). What is likely to happen to U.S.production of corn ethanol and u.S.imports of sugar ethanol?

Two large countries are thinking of imposing a tariff on the same good. A) What is the best possible outcome for these two large countries? B) Is this outcome a Nash equilibrium?

Implementing a regional free­trade agreement may have an Effect in which, due to reduced tariffs, a nation begins to import a Product from another member country that it had previously Imported from outside the new trade region.This effect is called:

Many regional trade agreements include other provisions that are Not part of the treaty, but they are add­ons that might be Important to trade issues.These are called:

Suppose that the U.S.government required firms to pay a living Wage to workers in their subsidiaries or contracting firms in Developing countries.As a consequence of this requirement, Wages would likely _______ to the living wage and employment Would likely _________.

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

What complex set of freetrade area regulations prohibits non Member country imports to a hightariff member country via a Lowtariff member country?

Implementing a regional freetrade agreement may have an Effect in which, due to reduced tariffs, a nation begins to import a Product from another member country that it had previously Imported from outside the new trade region.This effect is called:

Many regional trade agreements include other provisions that are Not part of the treaty, but they are addons that might be Important to trade issues.These are called:

Suppose that the U.S.government required firms to pay a living Wage to workers in their subsidiaries or contracting firms in Developing countries.As a consequence of this requirement, Wages would likely _ to the living wage and employment Would likely ___.