Question 1

The following figure illustrates Country A's domestic market for a specific imported good.
 
-With free trade Country A imports:

Accepted Answer

A

Question 2

The following figure illustrates Country A's domestic market for a specific imported good.
 
-Suppose Country A forms a customs union with Country B, Country A will import:

Accepted Answer

Country A will import goods from Country B that are cheaper in Country B than in Country A. This is represented by the area Q1 to Q9 in the diagram.

Question 3

The following figure illustrates Country A's domestic market for a specific imported good.
 
-Suppose Country A forms a customs union with Country C, Country A will import:

Accepted Answer

Country A will import Q² to Q⁸ from Country C because the customs union will eliminate tariffs and other trade barriers between the two countries, making it cheaper for Country A to import goods from Country C.

Question 4

What is the difference between a free-trade area and a customs union?

Accepted Answer

The answer of What is the difference between a free-trade...

Question 5

Describe how trade deflection occurs when countries form a free-trade area.

Accepted Answer

The answer of Describe how trade deflection occurs when countries...

Question 6

List and describe the features of an economic union.

Accepted Answer

The answer of List and describe the features of an...

Question 7

List the reasons that rules of origin are necessary for imports.

Accepted Answer

The answer of List the reasons that rules of origin...

Question 8

Suppose that you were given the task of determining the effects on imports of a preferential trade agreement for a particular industry. In general terms, how would you estimate the effects on trade and employment in the industry?

Accepted Answer

The answer of Suppose that you were given the task...

Question 9

What is a foreign trade zone? How do businesses use them as a part of engaging in international trade?

Accepted Answer

The answer of What is a foreign trade zone? How...

Question 10

Why is trade diversion considered harmful to world welfare?

Accepted Answer

The answer of Why is trade diversion considered harmful to...

Question 11

Why has the CAP caused friction in international trade relations between the U.S. and the EU?

Accepted Answer

The answer of Why has the CAP caused friction in...

Question 12

What are the major differences between the history and structure of the EU and NAFTA?

Accepted Answer

The answer of What are the major differences between the...

Question 13

Describe MERCOSUR and discuss its development.

Accepted Answer

The answer of Describe MERCOSUR and discuss its development....

Question 14

Describe the relationship between RTAs and MTNs in terms of substitutes and complements.

Accepted Answer

The answer of Describe the relationship between RTAs and MTNs...

Quiz 10: Regional Economic Arrangements

The following figure illustrates Country A's domestic market for a specific imported good. -With free trade Country A imports:

The following figure illustrates Country A's domestic market for a specific imported good. -Suppose Country A forms a customs union with Country B, Country A will import:

The following figure illustrates Country A's domestic market for a specific imported good. -Suppose Country A forms a customs union with Country C, Country A will import: