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Question: question 31 a benefit of being in a customs union...

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QUESTION 31

  1. A benefit of being in a customs union is,  

    a.

    a customs union tends to have more bargaining power in trade agreements than a country has by itself

    b.

    a customs union can accelerate the speed of technical advance

    c.

    both A and B

    d.

    neither A nor B

3 points   

QUESTION 32

  1. Which of the following is true regarding trade protectionism?

    a.

    intraindustry trade tends to cause more protectionist pressure than interindustry trade

    b.

    particular industries that lose from international trade tend to exert more protectionist pressure than industries that don't lose from international trade

    c.

    owners of resources that are abundant in a country tend to exert more protectionist pressure than owners of resources that are scarce in a country

    d.

    all of the above are true

3 points   

QUESTION 33

  1. Regarding international trade, which of the following is true?

    a.

    countries gain from trade only by exporting

    b.

    countries gain from trade only by importing

    c.

    the absolute advantage rather than the comparative advantage determines who producers are

    d.

    for a given set of resources, international trade allows for higher worldwide production and consumption levels than a no trade situation

3 points   

QUESTION 34

  1. The supply of protectionism is mainly from,

    a.

    the particular firms that lose from international trade

    b.

    the owners of resources that lose from international trade

    c.

    national governments

    d.

    both A and B

3 points   

QUESTION 35

  1. Regarding preferential trade agreements,

    a.

    in actual practice, trade diversion losses tend to be greater than trade creation gains

    b.

    one PTA tends to be better than many PTAs (if they can be achieved)

    c.

    they tend to diminish the size of trade wars with other members of the PTA

    d.

    they tend to reduce members nation's long run economic growth rates

3 points   

QUESTION 36

  1. Consider situations where a country goes from not allowing trade of an item to having trade of that item.

    a.

    when it goes from the no trade case to exporting, the price falls in the country; and when it goes from the no trade case to importing, the price falls in the country

    b.

    when it goes from the no trade case to exporting, the price falls in the country; and when it goes from the no trade case to importing, the price rises in the country

    c.

    when it goes from the no trade case to exporting, the price rises in the country; and when it goes from the no trade case to importing, the price falls in the country

    d.

    when it goes from the no trade case to exporting, the price rises in the country; and when it goes from the no trade case to importing, the price rises in the country

3 points   

QUESTION 37

  1. Consider a case where a country imports of very large quantity of Good W and the Terms of Trade Effects Tariff Model holds. When the country changes from trade in Good W without a tariff to trade in Good W with a tariff (assuming no retaliation on that product),

    a.

    producer surplus falls and consumer surplus falls

    b.

    producer surplus falls and consumer surplus rises

    c.

    producer surplus rises and consumer surplus falls

    d.

    producer surplus rises and consumer surplus rises

3 points   

QUESTION 38

  1. Suppose the world price of Good Z is less than the no trade domestic price of Good Z in the country of St. Marie. When St. Marie changes from no trade in Good Z to allowing trade (with no tariffs) in Good Z,

    a.

    St. Marie consumers are helped and St. Marie producers are hurt

    b.

    St. Marie consumers are helped and St. Marie producers are helped

    c.

    St. Marie consumers are hurt and St. Marie producers are hurt

    d.

    St. Marie consumers are hurt and St. Marie producers are helped

3 points   

QUESTION 39

  1. Consider a case where a country imports Good R (and there are no terms of trade effects). When the country changes from trade in Good R without an import quota to trade in Good R with a (binding) quota (assuming no retaliation on that product),

    a.

    domestic consumption falls and domestic production falls

    b.

    domestic consumption falls and domestic production rises

    c.

    domestic consumption rises and domestic production falls

    d.

    domestic consumption rises and domestic production rises

3 points   

QUESTION 40

  1. Consider a case where a country imports Good H (and there are no terms of trade effects). When the country changes from trade in Good H without an import quota to trade in Good H with a (binding) quota (assuming no retaliation on that product),

    a.

    imports increase and total surplus increases

    b.

    imports increase and total surplus decreases

    c.

    imports decrease and total surplus increases

    d.

    imports decrease and total surplus decreases

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