Question 1

National policy always overrides free trade in matters of environmental concern.

Accepted Answer

National policy does not always override free trade in matters of environmental concern. The relationship between national policies and free trade agreements can be complex, and there are instances where international trade agreements include provisions for environmental protection that must be respected by the participating countries.

Question 2

According to the Application,what was the moral of the story concerning free trade?

Accepted Answer

Trade affects both employment and prices, as it can lead to job displacement in certain sectors while reducing prices for consumers.

Question 3

What are some of the reasons why people protest against free trade?

Accepted Answer

All of the choices listed are common concerns associated with free trade. People worry about income inequality as trade can benefit certain sectors of the economy more than others. There are also concerns about losing national independence and sovereignty because countries might become too dependent on others for essential goods or services. Additionally, the fear of losing cultural identity is prevalent, as global trade can lead to the spread and dominance of certain cultures over others.

Question 4

Suppose the U.S.imposes a ban on imported steel from China because the Chinese steel was made with factories that pollute the environment.If China complains to the WTO regarding the U.S.ban,the WTO will side with:

Accepted Answer

The answer of Suppose the U.S.imposes a ban on imported...

Question 5

According to the application,how large was the change in relative price that helped the poor that can be attributed to trade with China?

Accepted Answer

The application indicates that the change in relative price benefiting the poor due to trade with China was 1/3.

Question 6

Based on what you learned from the application,can a firm who exports to the U.S.be charged with dumping even though the price they sell at home is lower?

Accepted Answer

The Department of Commerce can use a "constructed value" to estimate home market prices, which may be higher than actual prices, and firms can provide overstated data to support dumping claims.

Question 7

According to the application,living standards have NOT become more unequal because:

Accepted Answer

The application states that the prices of goods and services that low income groups have paid have risen slower than the prices of goods and services that high income groups have paid. This suggests that the cost of living has not become more unequal, as low income groups are not experiencing a disproportionately higher increase in prices.

Question 8

As punishment to Europe for refusing to remove their ban on U.S.and Canadian hormone-treated beef,the WTO allowed the U.S.and Canada:

Accepted Answer

The question states that the punishment is for Europe's refusal to remove their ban on U.S. and Canadian hormone-treated beef. Therefore, the best choice is C, which allows the U.S. and Canada to impose retaliatory tariffs on a wide range of European products. This is a form of economic retaliation that would hurt European industries and put pressure on European governments to change their policies. Options A and D only target beef products, while option B is too extreme and would have negative implications for both sides.

Question 9

The government can facilitate the transfer of unskilled workers to high-skilled jobs by:

Accepted Answer

Providing assistance for education and training for unskilled workers would equip them with skills that are in demand in the current job market. This would lead to a more efficient labor market where workers are matched with jobs that suit their skills and employers can find suitable employees. Increasing tariffs does not directly address the issue of skill mismatch, and laying off skilled workers would not solve the problem of unemployment among unskilled workers.

Question 10

Under current WTO rules,a country can adopt:

Accepted Answer

Under current WTO rules, a country can adopt any environmental standard it chooses as long as it does not discriminate against foreign producers. This means that a country can set its own environmental standards, but cannot use them as a means of protectionism or unfair trade practices towards foreign producers or products. WTO rules encourage member countries to find a balance between protecting the environment and promoting trade.

Question 11

According to the application,the goods that lower income individuals consume tend to be:

Accepted Answer

Non-durable goods, such as food, clothing, and household items, are typically cheaper and more affordable for lower income individuals. They are also necessities for daily living, making them a priority for those with limited resources. Durable goods, on the other hand, tend to be more expensive and are often seen as a luxury for those on a tight budget. Non-tradeable goods and services may also be consumed by lower income individuals, but non-durable goods are the most common.

Question 12

Based on what you learned from the application,how will the "constructed value" method used by the Department of Commerce affect the number of cases that it will deem as dumping?

Accepted Answer

The "constructed value" method allows the Department of Commerce to calculate the normal value of a product using a constructed price based on the costs of production in the exporting country, rather than the actual market price. This method is likely to result in a higher normal value and, therefore, a higher margin of dumping. As a result, the Department of Commerce is more likely to identify more cases of dumping into the U.S.

Question 13

A U.S.boycott against Mexican tuna caught in nets was:

Accepted Answer

The answer of A U.S.boycott against Mexican tuna caught in...

Question 14

According to the application,how does the Department of Commerce determine the price of the good in the foreign market?

Accepted Answer

The answer of According to the application,how does the Department...

Question 15

The difficulty with enforcing anti-dumping laws is that predatory pricing is difficult to determine if the lower price is due to:

Accepted Answer

If the lower price is due to price discrimination, it is not considered predatory pricing and therefore not a violation of anti-dumping laws. On the other hand, higher costs, firm generosity, or economies of scale do not necessarily justify price undercutting and therefore cannot serve as a defense against anti-dumping allegations.

Question 16

Dumping is sometimes legal under international trade agreements.

Accepted Answer

The answer of Dumping is sometimes legal under international trade...

Question 17

Why did the Application claim that Sam Walton "effectively ran an anti-poverty program"?

Accepted Answer

The application claims that Sam Walton effectively ran an anti-poverty program because Walmart stocked its shelves with lower priced goods and services imported from countries like China, making these products more accessible and affordable for low-income individuals and families.

Question 18

According to the application,examples of non-durable goods include:

Accepted Answer

Non-durable goods refer to products that have a short lifespan and are typically consumed or used up quickly. Toys are an example of non-durable goods because they are meant to be played with and eventually wear out or break. Cars and televisions, on the other hand, are considered durable goods because they have a longer lifespan and are intended to be used over a longer period of time. Massages are not goods, but rather a service, and therefore do not fall under the category of durable or non-durable goods.

Question 19

Since 1973,in the United States wages of skilled workers have:

Accepted Answer

According to the passage, "the wages of skilled workers have risen faster than those of unskilled workers."

Question 20

According to the application,how many cases of dumping in 1995-1998 used the actual price in the foreign market to make a determination if a dumping occurred?

Accepted Answer

The application states that only 4 out of 141 cases used the actual price in the foreign market to determine if dumping occurred.

Quiz 18: International Trade and Public Policy