Question 1

Which of the following is an example of a negative externality?

Accepted Answer

A) The discovery of one firm is freely copied by other firms. 
B) A firm dumps its industrial wastes into a nearby river. 
C) The government subsidizes research and development expenditures. 
D) A consumer buys more units of a product than she can consume. 
A) The discovery of one firm is freely copied by other firms. 
B) A firm dumps its industrial wastes into a nearby river. 
C) The government subsidizes research and development expenditures. 
D) A consumer buys more units of a product than she can consume.

Question 2

Figure: The Home and World Market   (Figure: The Home and World Markets) The loss of consumer
Surplus in the home country is:

Accepted Answer

A) $480. 
B) $540. 
C) $160. 
D) $600. 
A) $480. 
B) $540. 
C) $160. 
D) $600.

Question 3

(Figure: U.S.Imports from Mexico and Asia) With the $100 tariff,
The United States will import ______ from Mexico and _______
From China.

Accepted Answer

A) 400; 100 
B) 250; 250 
C) 250; 500 
D) 400; 200 
A) 400; 100 
B) 250; 250 
C) 250; 500 
D) 400; 200

Question 4

U.S.tire production involves large social costs from air pollution.
How will stronger U.S.environmental regulations requiring firms
To reduce their air pollutants affect U.S.tire imports?

Accepted Answer

A) Stronger U.S.environmental regulations will cause increases in U.S.tire imports. 
B) Stronger U.S.environmental regulations will cause decreases in U.S.tire imports. 
C) Stronger U.S.environmental regulations will neither cause increases nor decreases in U.S.tire imports 
D) Stronger U.S.environmental regulations will cause decreases in U.S.tire imports but not reduce tire producers' emissions of
Air pollutants. 
A) Stronger U.S.environmental regulations will cause increases in U.S.tire imports. 
B) Stronger U.S.environmental regulations will cause decreases in U.S.tire imports. 
C) Stronger U.S.environmental regulations will neither cause increases nor decreases in U.S.tire imports 
D) Stronger U.S.environmental regulations will cause decreases in U.S.tire imports but not reduce tire producers' emissions of
Air pollutants.

Question 5

Which of the following features is included in the NAFTA
Agreement?
I.a common tariff structure adopted by Canada, Mexico, and the
United States
II.elimination of tariffs on trade among Canada, Mexico, and the
United States
III.free mobility of labor and capital among Canada, Mexico, and
The United States

Accepted Answer

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

Question 6

Why do some economists prefer multilateral trade agreements
over regional trade agreements?

Accepted Answer

There is a greater opportunity for trade

Question 7

According to one research study focusing on Indonesia, actions
By nongovernmental organizations are ___________ than
Importing countries' threats to raise tariffs.

Accepted Answer

A) less effective in raising wages and limiting declines in employment 
B) more effective in raising wages and limiting declines in employment 
C) less effective in raising wages but more effective in limiting declines in employment 
D) more effective in raising wages but less effective in limiting declines in employment 
A) less effective in raising wages and limiting declines in employment 
B) more effective in raising wages and limiting declines in employment 
C) less effective in raising wages but more effective in limiting declines in employment 
D) more effective in raising wages but less effective in limiting declines in employment

Question 8

The negative effects of trade diversion are reduced when:

Accepted Answer

A) trade diversion is more than offset by trade creation. 
B) consumers in the importing nation have a change in their buying habits. 
C) there is a cost increase in nations outside the region. 
D) the free­trade agreement includes more members. 
A) trade diversion is more than offset by trade creation. 
B) consumers in the importing nation have a change in their buying habits. 
C) there is a cost increase in nations outside the region. 
D) the free­trade agreement includes more members.

Question 9

Which of the following is NOT part of the NAFTA?

Accepted Answer

A) tariff elimination on trade between member nations 
B) an agreement on worker rights in each country 
C) an agreement on environmental conditions in each country 
D) elimination of restrictions on movement of labor between member countries 
A) tariff elimination on trade between member nations 
B) an agreement on worker rights in each country 
C) an agreement on environmental conditions in each country 
D) elimination of restrictions on movement of labor between member countries

Question 10

Suppose that production of steel in the United States involves
Negative externalities.Now suppose that U.S.tariffs on steel
Imports are eliminated and U.S.imports of steel increase.What
Effect does the elimination of these tariffs have on total social
Costs associated with steel production in the United States?

Accepted Answer

A) Total social costs will increase. 
B) They will not change. 
C) They will decrease. 
D) They will increase but may be smaller than the private gains from increased steel imports. 
A) Total social costs will increase. 
B) They will not change. 
C) They will decrease. 
D) They will increase but may be smaller than the private gains from increased steel imports.

Question 11

Figure: The Home and World Market   (Figure: The Home and World Markets) If a tariff of $10 is imposed
By the home country, it causes a loss in the world market of:

Accepted Answer

A) $240. 
B) $160. 
C) $200. 
D) $80. 
A) $240. 
B) $160. 
C) $200. 
D) $80.

Question 12

Which of the following agreements signed in 1989 is the
Precursor to NAFTA?

Accepted Answer

A) the U.S.­Mexico Free Trade Agreement 
B) the Canada­Mexico Free Trade Agreement 
C) the Canada­U.S.Free Trade Agreement 
D) the Canada­Mexico­U.S.Free Trade Agreement 
A) the U.S.­Mexico Free Trade Agreement 
B) the Canada­Mexico Free Trade Agreement 
C) the Canada­U.S.Free Trade Agreement 
D) the Canada­Mexico­U.S.Free Trade Agreement

Which of the following is an example of a negative externality?

Figure: The Home and World Market (Figure: The Home and World Markets) The loss of consumer Surplus in the home country is:

(Figure: U.S.Imports from Mexico and Asia) With the $100 tariff, The United States will import from Mexico and _ From China.

U.S.tire production involves large social costs from air pollution. How will stronger U.S.environmental regulations requiring firms To reduce their air pollutants affect U.S.tire imports?

Why do some economists prefer multilateral trade agreements over regional trade agreements?

According to one research study focusing on Indonesia, actions By nongovernmental organizations are ___________ than Importing countries' threats to raise tariffs.

The negative effects of trade diversion are reduced when:

Which of the following is NOT part of the NAFTA?

Figure: The Home and World Market (Figure: The Home and World Markets) If a tariff of $10 is imposed By the home country, it causes a loss in the world market of:

Which of the following agreements signed in 1989 is the Precursor to NAFTA?

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

Which of the following is an example of a negative externality?

Figure: The Home and World Market (Figure: The Home and World Markets) The loss of consumer Surplus in the home country is:

(Figure: U.S.Imports from Mexico and Asia) With the $100 tariff, The United States will import ______ from Mexico and _______ From China.

U.S.tire production involves large social costs from air pollution. How will stronger U.S.environmental regulations requiring firms To reduce their air pollutants affect U.S.tire imports?

Why do some economists prefer multilateral trade agreements over regional trade agreements?

According to one research study focusing on Indonesia, actions By nongovernmental organizations are ___________ than Importing countries' threats to raise tariffs.

The negative effects of trade diversion are reduced when:

Which of the following is NOT part of the NAFTA?

Figure: The Home and World Market (Figure: The Home and World Markets) If a tariff of $10 is imposed By the home country, it causes a loss in the world market of:

Which of the following agreements signed in 1989 is the Precursor to NAFTA?

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) With the $100 tariff, The United States will import from Mexico and _ From China.