Question 1

The following payoff matrix shows outcomes of various strategies that the countries of Home and Foreign can follow to decide to regulate or not regulate pollution. The columns show Foreign's actions, and the rows show Home's actions. The values in the upper right-hand corner of each element give Foreign's net benefits; the values in the lower left-hand corner of each element give Home's net benefits. Net benefits are the environmental benefits from regulation minus the costs associated with installing pollution control equipment.  I. Using the payoff matrix, what is likely to happen if there are no international agreements to limit pollution?
II. In the payoff matrix, which element represents a Nash equilibrium?
III. Why is the element you selected in II a Nash equilibrium?

Accepted Answer

The answer of The following payoff matrix shows outcomes of...

Question 2

The U.S. sugar quota sometimes causes the U.S. domestic price of sugar to be twice as high as the world price. How does the sugar quota affect the U.S. price of corn and the U.S. environment?

Accepted Answer

The answer of The U.S. sugar quota sometimes causes the...

Question 3

Why do the U.S. and European Union governments apply tariffs to solar panel imports, even though solar panels generate positive consumption externalities?

Accepted Answer

The answer of Why do the U.S. and European Union...

Question 4

Two large countries are thinking of imposing a tariff on the same good.
I. What is the best possible outcome for these two large countries?
II. Is the best outcome a Nash equilibrium?

Accepted Answer

The answer of Two large countries are thinking of imposing...

Question 5

The authors conclude that the WTO:

Accepted Answer

The authors of the passage state that in the past, the WTO was criticized for being too focused on trade and less willing to consider environmental issues. However, in recent years, there has been a shift in the WTO's approach, and it has become more willing to consider environmental issues in its dispute settlement rulings. This is supported by examples such as the US-Shrimp case and the EC-Biotech case. Therefore, option D is the best choice as it accurately reflects the authors' conclusion.

Question 6

Why do some economists prefer multilateral trade agreements over regional trade agreements?

Accepted Answer

The answer of Why do some economists prefer multilateral trade...

Question 7

Suppose that the following graph gives the U.S. supply (S) of and demand (D) for auto parts (say steering wheels). U.S. automakers can also import steering wheels from Mexico at $50 each and from Japan at $40 each. Currently, there is a 60% tariff on imported steering wheels.  I. How many steering wheels will the United States import?
II. How much tariff revenue will the U.S. government collect?
III. Suppose that the United States and Mexico become part of NAFTA and there is free trade between the two countries. Now how many steering wheels will the United States import?
IV. Calculate the trade creation gains from free trade in steering wheels with Mexico.
V. Calculate the trade diversion losses from free trade in steering wheels with Mexico.
VI. Does the United States gain or lose as a result of free trade in steering wheels with Mexico?

Accepted Answer

The answer of Suppose that the following graph gives the...

Question 8

Democratic and Republican candidates in the 2016 U.S. Presidential election have voiced opposition to the Trans-Pacific Partnership. What concerns have they and others in the United States raised over TPP?

Accepted Answer

The answer of Democratic and Republican candidates in the 2016...

Question 9

The United States imposes a high (15.3%) tariff on garments imported from Bangladesh.
I. What is the effect of the high (15.3%) U.S. tariff on garments imported from Bangladesh on the Bangladesh economy?
II. In what way does this tariff affect Bangladeshi workers?

Accepted Answer

The answer of The United States imposes a high (15.3%)...

Question 10

Discuss the major features of the COP21 Paris Agreement.

Accepted Answer

The answer of Discuss the major features of the COP21...

Question 11

I. Why does the United States both import and export ethanol?
II. Suppose that the United States allowed domestic fuel producers to use ethanol made from any source (i.e., corn or sugar). What is likely to happen to U.S. production of corn ethanol and U.S. imports of sugar ethanol?

Accepted Answer

The answer of I. Why does the United States both...

Question 12

Have the GATT-WTO rulings on environmental cases adversely affected the U.S. environment?

Accepted Answer

The answer of Have the GATT-WTO rulings on environmental cases...

Question 13

Suppose that the U.S. government required U.S. firms to pay a "living wage" to workers in its subsidiaries or contracting firms in developing countries.
I. What are the likely consequences of this requirement?
II. How would one determine a living wage?

Accepted Answer

The answer of Suppose that the U.S. government required U.S....

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

The U.S. sugar quota sometimes causes the U.S. domestic price of sugar to be twice as high as the world price. How does the sugar quota affect the U.S. price of corn and the U.S. environment?

Why do the U.S. and European Union governments apply tariffs to solar panel imports, even though solar panels generate positive consumption externalities?

Two large countries are thinking of imposing a tariff on the same good. I. What is the best possible outcome for these two large countries? II. Is the best outcome a Nash equilibrium?

The authors conclude that the WTO:

Why do some economists prefer multilateral trade agreements over regional trade agreements?

Democratic and Republican candidates in the 2016 U.S. Presidential election have voiced opposition to the Trans-Pacific Partnership. What concerns have they and others in the United States raised over TPP?

The United States imposes a high (15.3%) tariff on garments imported from Bangladesh. I. What is the effect of the high (15.3%) U.S. tariff on garments imported from Bangladesh on the Bangladesh economy? II. In what way does this tariff affect Bangladeshi workers?

Discuss the major features of the COP21 Paris Agreement.

I. Why does the United States both import and export ethanol? II. Suppose that the United States allowed domestic fuel producers to use ethanol made from any source (i.e., corn or sugar). What is likely to happen to U.S. production of corn ethanol and U.S. imports of sugar ethanol?

Have the GATT-WTO rulings on environmental cases adversely affected the U.S. environment?

Suppose that the U.S. government required U.S. firms to pay a "living wage" to workers in its subsidiaries or contracting firms in developing countries. I. What are the likely consequences of this requirement? II. How would one determine a living wage?