Question 1

Which is a better outcome for income and standard of living levels for large nations?

Accepted Answer

A)   no tariffs
B)   low tariffs
C)   high tariffs
D)   equal tariffs for all nationsE) A) and D)
F) None of the above

Question 2

Most economists are opposed to the "living wage" concept in foreign labor agreements because:

Accepted Answer

A)   it is barely enough for survival.
B)   most workers in low-income nations already earn more.
C)   workers should never earn more than the managers.
D)   it is well above the market wage, and many workers in poor nations would lose the opportunity to be employed.E) B) and C)
F) A) and C)

Question 3

In terms of efficiency, trade diversion is a _____ desirable outcome of a regional free-trade agreement, because trade is diverted from the _____ producer to the _____ producer.

Accepted Answer

A)   more; high-cost; low-cost
B)   more; less deserving; more deserving
C)   less; low-cost; high-cost
D)   less; foreign; domesticE) A) and C)
F) B) and C)

Question 4

(Figure: U.S. Imports from Mexico and Asia)  The graph illustrates a customs union between the United States and Mexico. The United States does not produce the product shown in the graph. Imports satisfy its domestic demand (designated by MUS) . The curves Smex and Sasia describe Mexican and Asian supplies. With a free trade price of $150 per unit, how many units will the United States import? US) . The curves Smex and Sasia describe Mexican and Asian supplies. With a free trade price of $150 per unit, how many units will the United States import?   A)  250 B)  400 C)  500 D)  600" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   250
B)   400
C)   500
D)   600E) C) and D)
F) A) and C)

Question 5

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.E) A) and B)
F) A) and C)

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.E) A) and B)
F) All of the above

Question 7

Why is NAFTA a free-trade area requiring rules of origin rather than a customs union?

Accepted Answer

A)   A free-trade agreement allows politically sensitive tariffs of each nation to remain unchanged.
B)   A customs union also requires rules of origin.
C)   The overall level of U.S. tariffs was much higher than the overall level of tariffs in Mexico and Canada.
D)   The overall levels of tariffs in Canada, Mexico, and the United States are similar, making rules of origin irrelevant.E) All of the above
F) A) and D)

Question 8

The negative effects of trade diversion are reduced when:

Accepted Answer

A)   trade creation more than offsets trade diversion.
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 free-trade agreement includes more members.E) B) and C)
F) A) and D)

Question 9

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.E) B) and D)
F) B) and C)

Question 10

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.E) B) and C)
F) A) and D)

Question 11

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.E) A) and B)
F) A) and D)

Question 12

As of May 2016, Republican and Democratic Presidential candidates:

Accepted Answer

A)   oppose the Trans-Pacific Partnership (TPP) .
B)   are in favor of the Trans-Pacific Partnership (TPP) .
C)   have not commented on the Trans-Pacific Partnership (TPP) .
D)   are indifferent about the Trans-Pacific Partnership (TPP) .E) B) and D)
F) B) and C)

Question 13

Because of the relationship among ethanol production, sugar, and corn, the authors of your text have concluded that:

Accepted Answer

A)   the corn subsidy is a big problem for ethanol exports.
B)   the sugar quota makes sugar so cheap in the United States that ethanol producers are using it instead of corn.
C)   because of the sugar quota and its high price, there is a huge demand for less-environmentally-friendly corn as a substitute in food products and for ethanol.
D)   there should be more intra-industry trade in ethanol.E) C) and D)
F) B) and C)

Question 14

Which of the following regional trade agreements is a free-trade area?

Accepted Answer

A)   NAFTA
B)   the European Union
C)   Mercosur
D)   NATOE) A) and B)
F) A) and C)

Question 15

Suppose country X currently does not produce widgets. Instead, it imports widgets from country Z. Then country X establishes a regional trade agreement with country Y. Following the formation of the regional trade agreement, it imports widgets from country Y. What has occurred?

Accepted Answer

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

Question 16

(Table: U.S. Demand for and Supply of Widgets)  The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. How many pairs of widgets will the United States produce?

Accepted Answer

A)   8
B)   9
C)   10
D)   11E) B) and C)
F) A) and D)

Question 17

Which of the following statements is FALSE?

Accepted Answer

A)   Trade creation is always good for countries.
B)   Trade diversion is always good for countries.
C)   Regional trade agreements may cause welfare losses
D)   Regional trade agreements may cause welfare gains.E) A) and D)
F) A) and B)

Question 18

A study of consumers' attitudes toward labor standards for the products they buy revealed that consumers:

Accepted Answer

A)   just do not care.
B)   would completely change their buying patterns and want to be 100% sure that products they buy are made in foreign factories with good working conditions.
C)   would pay a slight premium to ensure good working conditions.
D)   are more concerned about the prices they pay than working conditions overseas.E) C) and D)
F) A) and B)

Question 19

The WTO is considered a _____, whereas NAFTA and the European Union are _____.

Accepted Answer

A)   free-trade area; cartels
B)   cartel; multilateral agreements
C)   free-trade area; multilateral agreements
D)   multilateral agreement; regional trade agreementsE) A) and B)
F) B) and D)

Question 20

In a large-country case, an optimal tariff would be one:

Accepted Answer

A)   that increases the producer surplus.
B)   that raises the price of the product imported.
C)   in which the terms-of-trade gain exceeds the deadweight loss.
D)   that easily passes the legislative process.E) All of the above
F) A) and B)

Exam 11: International Agreements: Trade, Labor, and the Environment

Most economists are opposed to the "living wage" concept in foreign labor agreements because:

Correct Answer
verified

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

Correct Answer
verified

A study of consumers' attitudes toward labor standards for the products they buy revealed that consumers:

Correct Answer
verified

(Table: U.S. Demand for and Supply of Widgets) The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. How many pairs of widgets will the United States produce?

Correct Answer
verified

In a large-country case, an optimal tariff would be one:

Correct Answer
verified

Correct Answer
verified

The fundamental cause of the tragedy of the commons is:

Correct Answer
verified

Which of the following statements is FALSE?

Correct Answer
verified

Why is NAFTA a free-trade area requiring rules of origin rather than a customs union?

Correct Answer
verified

As of May 2016, Republican and Democratic Presidential candidates:

Correct Answer
verified

Which is a better outcome for income and standard of living levels for large nations?

Correct Answer
verified

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

Correct Answer
verified

Why are economists sometimes skeptical about international labor standards?

Correct Answer
verified

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

Correct Answer
verified

The negative effects of trade diversion are reduced when:

Correct Answer
verified

The WTO is considered a _, whereas NAFTA and the European Union are _.

Correct Answer
verified

Suppose country X currently does not produce widgets. Instead, it imports widgets from country Z. Then country X establishes a regional trade agreement with country Y. Following the formation of the regional trade agreement, it imports widgets from country Y. What has occurred?

Correct Answer
verified

Because of the relationship among ethanol production, sugar, and corn, the authors of your text have concluded that:

Correct Answer
verified

In terms of efficiency, trade diversion is a ___ desirable outcome of a regional free-trade agreement, because trade is diverted from the _ producer to the ___ producer.

Correct Answer
verified

Which of the following regional trade agreements is a free-trade area?

Correct Answer
verified

Exam 11: International Agreements: Trade, Labor, and the Environment

Most economists are opposed to the "living wage" concept in foreign labor agreements because:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A study of consumers' attitudes toward labor standards for the products they buy revealed that consumers:

Correct AnswerverifiedShow Answer

(Table: U.S. Demand for and Supply of Widgets) The United States can import widgets from China at $4 each and from Mexico at $5 each. The United States imposes a tariff of $2 on each of its widget imports. How many pairs of widgets will the United States produce?

Correct AnswerverifiedShow Answer

In a large-country case, an optimal tariff would be one:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The fundamental cause of the tragedy of the commons is:

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

Why is NAFTA a free-trade area requiring rules of origin rather than a customs union?

Correct AnswerverifiedShow Answer

As of May 2016, Republican and Democratic Presidential candidates:

Correct AnswerverifiedShow Answer

Which is a better outcome for income and standard of living levels for large nations?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Why are economists sometimes skeptical about international labor standards?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The negative effects of trade diversion are reduced when:

Correct AnswerverifiedShow Answer

The WTO is considered a _____, whereas NAFTA and the European Union are _____.

Correct AnswerverifiedShow Answer

Suppose country X currently does not produce widgets. Instead, it imports widgets from country Z. Then country X establishes a regional trade agreement with country Y. Following the formation of the regional trade agreement, it imports widgets from country Y. What has occurred?

Correct AnswerverifiedShow Answer

Because of the relationship among ethanol production, sugar, and corn, the authors of your text have concluded that:

Correct AnswerverifiedShow Answer

In terms of efficiency, trade diversion is a _____ desirable outcome of a regional free-trade agreement, because trade is diverted from the _____ producer to the _____ producer.

Correct AnswerverifiedShow Answer

Which of the following regional trade agreements is a free-trade area?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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The WTO is considered a _, whereas NAFTA and the European Union are _.

Correct Answer
verified

Correct Answer
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Correct Answer
verified

In terms of efficiency, trade diversion is a ___ desirable outcome of a regional free-trade agreement, because trade is diverted from the _ producer to the ___ producer.

Correct Answer
verified

Correct Answer
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