Question 1

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

Stronger U.S. environmental regulations would increase the costs of production for U.S. tire producers and reduce their competitiveness in the global market. This will influence buyers to turn to cheaper imports, decreasing the demand for domestically produced tires and increasing imports.

Question 2

When does an externality occur?

Accepted Answer

An externality occurs when one person's production or consumption of a good affects another person. This can have positive or negative effects on the affected party and can be either intentional or unintentional. For example, pollution from a factory can negatively affect the health of nearby residents, or a vaccination can have positive effects on both the vaccinated individual and those around them by reducing the spread of disease.

Question 3

The VER between the United States and Japan was shown to
_______________ gas consumption, _______________ the use
Of energy, and _______________ gas mileage from
Automobiles.

Accepted Answer

The VER between the United States and Japan was shown to raise gas consumption, lower the use of energy, and lower gas mileage from automobiles.

Question 4

The tragedy of the commons refers to:

Accepted Answer

The tragedy of the commons refers to the idea that when everyone has free access to a resource, it will be overused and depleted. This occurs because individuals act in their own self-interest rather than considering the larger collective impact on the resource.

Question 5

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

Accepted Answer

The relationship among ethanol production, sugar, and corn leads to a situation where the sugar quota and its high price lead to a huge demand for corn as a substitute in both food products and ethanol. This creates a problem for the environment as corn is less environmentally friendly compared to other substitutes. Therefore, the authors have concluded that there is a huge demand for less environmentally friendly corn as a substitute in food products and for ethanol.

Question 6

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

Accepted Answer

The WTO allows nations to enforce any standards for particular products as long as the standards apply equally to domestic producers and importers. This means that countries can set their own environmental standards and enforce them, but they have to do so equally for both domestic and foreign producers. The WTO does not have provisions that allow countries to ban all imports from nations that do not meet their environmental standards. While there may be some inconsistencies in the WTO's rulings, this is not related to its provisions for environmental protection.

Question 7

Suppose that there is a negative externality associated with
Alcohol consumption in the United States.Will the United States
Be better or worse off if it eliminates all tariffs on alcohol
Imports?

Accepted Answer

Eliminating tariffs on imported alcohol would lead to an increase in alcohol consumption, which would exacerbate the negative externality associated with alcohol consumption. However, if the private gains from trade (i.e. the benefits to consumers from having access to cheaper imported alcohol) exceed the increased social costs of alcohol consumption, then the United States would be better off overall. This is because the net gain to society from increased trade would outweigh the negative externality costs. Therefore, the United States would be better off only if the private gains from trade exceed the increased social costs of alcohol consumption when tariffs on imported alcohol are eliminated.

Question 8

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

Accepted Answer

Dumping industrial wastes into a nearby river can have negative effects on the health of people and wildlife living near the river, leading to higher healthcare costs and damage to the ecosystem. This is an example of a negative externality, where the firm is not fully bearing the costs of its actions.

The other options are not necessarily examples of negative externalities. A) is the copying of a firm's discovery, which could be seen as a form of competition, but not necessarily a negative externality. C) is a government subsidy for R&D, which may have positive or negative effects, depending on the specific context. D) is an example of individual choice, but not necessarily a negative externality.

Question 9

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

If domestic fuel producers are allowed to use ethanol made from any source, they may switch to the cheaper alternative, which in this case would be sugar ethanol. As a result, the production of corn ethanol is likely to decrease. However, the use of sugar ethanol is likely to increase, leading to an increase in the imports of sugar ethanol from other countries.

Question 10

Suppose that there is a negative externality associated with
Alcohol consumption in the United States.What does this
Negative consumption externality imply about the relationship
Between the demand curve for alcohol and the social marginal
Benefit (SMB) curve for alcohol?

Accepted Answer

A negative externality implies that the private demand curve (reflecting private marginal benefit) lies above the social marginal benefit curve, as the social costs are not fully accounted for in the private demand.

Question 11

The tuna­dolphin dispute was ruled by the WTO in favor of
Nations that _______________.The ruling said that trading
Partners _______________ bar imports based on
_______________.

Accepted Answer

The ruling said that trading partners who exported tuna to the United States and Europe could not bar imports based on a production process such as the size of the nets used.

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

Eliminating tariffs on alcohol imports would likely lower the price of alcohol, leading to increased consumption. This would increase the negative externalities associated with alcohol consumption, such as the costs of publicly funded alcoholism treatment centers, thus increasing the social costs.

Question 13

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

Eliminating tariffs and increasing imports can reduce domestic production, thus decreasing the negative externalities and total social costs associated with domestic steel production.

Question 14

Do the provisions of the GATT and WTO permit countries to
Apply their own environmental regulations against imports?

Accepted Answer

The GATT and WTO allow countries to apply environmental regulations to imports as long as they are applied uniformly to both domestic and imported goods, ensuring no discrimination.

Question 15

WTO rulings with respect to environmental issues have:

Accepted Answer

WTO rulings have generally increased regard for environmental protection by requiring countries to ensure that their domestic environmental regulations do not unfairly discriminate against imported goods. This has led many countries to adopt more stringent environmental laws affecting both domestic producers and imported goods. While WTO rulings have occasionally been criticized for prioritizing economic interests over environmental concerns, the organization has taken steps in recent years to integrate environmental considerations into its trade policies.

Question 16

The tragedy of the commons refers to the idea that:

Accepted Answer

The tragedy of the commons refers to the idea that common property, such as land or resources, is often exploited and overused because each individual is incentivized to use as much as possible before others do, leading to depletion of the resource and negative outcomes for everyone. This concept is often used to explain issues like overfishing, deforestation, and pollution in shared spaces.

Question 17

With respect to environmental issues, the GATT:

Accepted Answer

The GATT allows countries to adopt environmental laws that are applied uniformly against domestic producers and imports. This is because the GATT operates on the principle of non-discrimination, meaning that countries cannot treat foreign producers less favorably than domestic producers. Therefore, any environmental laws must apply equally to both.

Question 18

The fundamental cause of the tragedy of the commons is:

Accepted Answer

The tragedy of the commons occurs when a resource is owned collectively and individuals act in their own self-interest, leading to overuse and depletion of the resource. This occurs because there are no defined property rights, and no one individual has an incentive to conserve the resource for the future. International trade, ignorance, and tariffs may contribute to the issue, but lack of defined property rights is the fundamental cause.

Question 19

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

The WTO ruled that the U.S. could not ban gasoline imports from Venezuela and Brazil on environmental grounds because they had not given those countries a grace period as they had given their own U.S. companies.

Question 20

The phenomenon known as the tragedy of the commons occurs
Whenever:

Accepted Answer

The tragedy of the commons occurs when there is no ownership of resources, leading to their depletion due to lack of management. This can happen in situations like overfishing in a shared ocean or pollution of the air.

Quiz 11: Exchange Rates I: the Monetary Approach in the Long Run

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?

When does an externality occur?

The VER between the United States and Japan was shown to _______ gas consumption, _ the use Of energy, and _________ gas mileage from Automobiles.

The tragedy of the commons refers to:

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

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

Suppose that there is a negative externality associated with Alcohol consumption in the United States.Will the United States Be better or worse off if it eliminates all tariffs on alcohol Imports?

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

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?

Suppose that there is a negative externality associated with Alcohol consumption in the United States.What does this Negative consumption externality imply about the relationship Between the demand curve for alcohol and the social marginal Benefit (SMB) curve for alcohol?

The tunadolphin dispute was ruled by the WTO in favor of Nations that _______.The ruling said that trading Partners _ bar imports based on _________.

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?

Do the provisions of the GATT and WTO permit countries to Apply their own environmental regulations against imports?

WTO rulings with respect to environmental issues have:

The tragedy of the commons refers to the idea that:

With respect to environmental issues, the GATT:

The fundamental cause of the tragedy of the commons is:

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?

The phenomenon known as the tragedy of the commons occurs Whenever:

Quiz 11: Exchange Rates I: the Monetary Approach in the Long Run

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?

When does an externality occur?

The VER between the United States and Japan was shown to _______________ gas consumption, _______________ the use Of energy, and _______________ gas mileage from Automobiles.

The tragedy of the commons refers to:

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

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

Suppose that there is a negative externality associated with Alcohol consumption in the United States.Will the United States Be better or worse off if it eliminates all tariffs on alcohol Imports?

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

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?

Suppose that there is a negative externality associated with Alcohol consumption in the United States.What does this Negative consumption externality imply about the relationship Between the demand curve for alcohol and the social marginal Benefit (SMB) curve for alcohol?

The tuna­dolphin dispute was ruled by the WTO in favor of Nations that _______________.The ruling said that trading Partners _______________ bar imports based on _______________.

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?

Do the provisions of the GATT and WTO permit countries to Apply their own environmental regulations against imports?

WTO rulings with respect to environmental issues have:

The tragedy of the commons refers to the idea that:

With respect to environmental issues, the GATT:

The fundamental cause of the tragedy of the commons is:

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?

The phenomenon known as the tragedy of the commons occurs Whenever:

The VER between the United States and Japan was shown to _______ gas consumption, _ the use Of energy, and _________ gas mileage from Automobiles.

The tunadolphin dispute was ruled by the WTO in favor of Nations that _______.The ruling said that trading Partners _ bar imports based on _________.