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1. The European Union is primarily intended to permit:
a.
Countries to adopt scientific tariffs on imports
b.
An agricultural commodity cartel within the group
c.
The adoption of export tariffs for revenue purposes
d.
Free movement of resources and products among member nations
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
2. Which of the following represents the stage where economic integration is most complete?
a.
Economic union
b.
Customs union
c.
Monetary union
d.
Common market
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
3. Which of the following represents the stage where economic integration is least complete?
a.
Free trade area
b.
Monetary union
c.
Common market
d.
Customs union
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 2
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
4. Customs union theory reasons that the formation of a customs union will decrease members’ real welfare when the:
a.
b.
c.
d.
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
5. Which economic integration scheme is solely intended to abolish trade restrictions among member countries, while
setting up common tariffs against nonmembers?
a.
Economic union
b.
Common market
c.
Free trade area
d.
Customs union
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
6. By 1992 the European Union had become a full-fledged:
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a.
Economic union
b.
Monetary union
c.
Common market
d.
Fiscal union
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
7. Which device has the European Union used to equalize farm-product import prices with politically determined
European Union prices, regardless of shifts in world prices?
a.
Variable levies
b.
Import quotas
c.
Import subsidies
d.
Domestic content regulations
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
8. Which trade instrument has the European Union used to insulate its producers and consumers of agricultural goods
from the impact of changing demand and supply conditions in the rest of the world?
a.
Domestic content regulations
b.
Variable import levies
c.
Voluntary export quotas
d.
Orderly marketing agreements
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
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Page 4
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
9. Assume that the formation of a customs union turns out to include the lowest-cost world producer of the product in
question. Which effect could not occur for the participating countries?
a.
Trade creation-production effect
b.
Trade creation-consumption effect
c.
Trade diversion
d.
Scale economies and competition
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
10. Which organization of nations permits free trade among its members in industrial goods, while each member
maintains freedom in its trade policies toward non-member countries?
a.
European Union
b.
Benelux
c.
Council for Mutual Economic Assistance
d.
North American Free Trade Association
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
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Page 5
11. Which of the following organizations is considered a regional trading arrangement?
a.
Organization of Petroleum Exporting Countries
b.
North Atlantic Treaty Organization
c.
Benelux
d.
International Tin Agreement
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
12. When products from high-cost suppliers within a customs union replace imports from a low-cost nation that is not a
member of the customs union, there exist(s):
a.
Dynamic welfare losses
b.
Dynamic welfare gains
c.
Trade creation
d.
Trade diversion
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
13. Which form of economic integration occurs when participating countries abolish tariffs on trade among themselves,
establish a common tariff on imports from nonmembers, and permit free movement of capital and labor within the
organization?
a.
Free trade area
b.
Economic union
c.
Common market
d.
Monetary union
ANSWER:
c
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Page 6
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
14. A static welfare effect resulting from the formation of the European Union would be:
a.
Economies of scale
b.
Trade diversion
c.
Investment incentives
d.
Increased competition
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
15. A dynamic welfare gain resulting from the formation of the European Union would be:
a.
Trade diversion
b.
Trade creation
c.
Diseconomies of scale
d.
Economies of scale
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
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Page 7
DATE MODIFIED:
6/22/2016 3:21 PM
16. Which organization was founded in 1957 whose objective was to create an economic union among its members?
a.
General Agreements on Tariffs and Trade
b.
Organization of Economic Cooperation and Development
c.
European Union
d.
Latin American Free Trade Association
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
17. The common agriculture policy of the European Union has supported European farmers via:
a.
Export tariffs and domestic content regulations
b.
Variable levies and voluntary export agreements
c.
Content regulations and export subsidies
d.
Export subsidies and variable levies
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
18. Which nation is not a member of the North American Free Trade Association?
a.
Canada
b.
Greenland
c.
Mexico
d.
United States
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
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Page 8
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
19. NAFTA is a:
a.
Monetary union
b.
Free trade area
c.
Common market
d.
Customs union
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
20. Under the European Union’s common agricultural policy, a variable import levy equals the:
a.
Amount by which the EU’s support price exceeds the world price
b.
Amount by which the world price exceeds the EU’s support price
c.
Support price of the EU
d.
World price
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
21. Members of the European Union find that “trade creation” is fostered when their economies are:
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Page 9
a.
Highly competitive
b.
Highly noncompetitive
c.
Small in economic importance
d.
Geographically distant
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
22. The European Union has achieved all of the following except:
a.
Adopted a common fiscal policy for member nations
b.
Established a common system of agricultural price supports
c.
Disbanded all tariffs among its member countries
d.
Levied common tariffs on products imported from nonmembers
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
23. When the United States, Canada, and Mexico form a free trade area, and Mexico begins importing a product from
Canada rather than from the lowest cost world producer.
a.
Trade diversion occurs
b.
Trade creation occurs
c.
World welfare rises
d.
World welfare falls to zero
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 10
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
24. When the formation of a free trade area results in the reduction of trade with nonmember nations in favor of member
countries, ____ occurs.
a.
Trade devaluation
b.
Trade revaluation
c.
Trade creation
d.
Trade diversion
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
25. Which country is not a member of the European Union?
a.
Spain
b.
Germany
c.
France
d.
Iceland
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
26. The implementation of the European Union has:
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Page 11
a.
Made it harder for Americans to compete against the Germans in the British market
b.
Made it easier for Americans to compete against the Germans in the British market
c.
Made it harder for Americans to compete against the Japanese in the British market
d.
Made it easier for Americans to compete against the Japanese in the British market
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
27. The common agricultural policy of the European Union has:
a.
Increased American farm exports to the EU
b.
Decreased American farm exports to the EU
c.
Lowered the price of American farm exports to the EU
d.
Not affected the price of American farm exports to the EU
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
28. The implementation of a common market involves all of the following except:
a.
Elimination of trade restrictions among member countries
b.
A common tax system and monetary union
c.
Prohibition of restrictions on factor movements
d.
A common tariff levied in imports from nonmembers
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
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Page 12
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
29. Under the common agricultural policy, exports of any surplus quantities of EU produce are encouraged through the
usage of:
a.
Variable levies
b.
Export subsidies
c.
Import quotas
d.
Countertrade
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
Figure 8.1 depicts the supply and demand schedules of calculators for Greece, a “small” country that is unable to affect
the world price. Greece’s supply and demand schedules of calculators are respectively depicted by SG and DG. Assume
that Greece imports calculators from either Germany or France. Suppose Germany is the world’s low-cost producer who
can supply calculators to Greece at $20 per unit, while France can supply calculators at $30 per unit.
Figure 8.1. Effects of a Customs Union
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30. Consider Figure 8.1. With free trade, Greece imports:
a.
3 calculators from France
b.
5 calculators from France
c.
3 calculators from Germany
d.
5 calculators from Germany
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
31. Consider to Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
Greece will import:
a.
1 calculator from Germany
b.
1 calculator from France
c.
3 calculators from Germany
d.
3 calculators from France
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
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Page 14
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
32. Consider Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
As a result of the $20 tariff, Greece’s consumer surplus falls by:
a.
$90
b.
$100
c.
$110
d.
$120
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
33. Consider Figure 8.1. Assume Greece levies a per-unit tariff of $20 on imports from both Germany and France.
The deadweight welfare loss to Greece, resulting from the $20 tariff, equals:
a.
$20
b.
$40
c.
$60
d.
$80
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
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Page 15
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
34. Referring to Figure 8.1, suppose Greece forms a customs union with France. Greece will import:
a.
3 calculators at a per-unit price of $30
b.
3 calculators at a per-unit price of $40
c.
6 calculators at a per-unit price of $30
d.
6 calculators at a per-unit price of $40
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
35. Consider Figure 8.1. The value of the trade diversion effect, resulting from the Greece/France customs union, equals:
a.
$5
b.
$10
c.
$15
d.
$20
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
36. Consider Figure 8.1. The value of the trade creation effect, resulting from the Greece/France customs union, equals:
a.
$5
b.
$10
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Page 16
c.
$15
d.
$20
ANSWER:
b
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
37. Consider Figure 8.1. Comparing the trade creation and trade diversion effects, the impact of the Greece/France
customs union on the welfare of Greece is:
a.
A $5 increase in economic welfare
b.
A $10 increase in economic welfare
c.
A $5 decrease in economic welfare
d.
No change in economic welfare
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
38. Consider Figure 8.1. Suppose Greece had formed a customs union with Germany, rather than France. The value of the
trade diversion effect would be:
a.
Zero
b.
$5
c.
$10
d.
$15
ANSWER:
a
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
Copyright Cengage Learning. Powered by Cognero.
Page 17
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
39. According to Figure 8.1, the formation of a Greece/Germany customs union would result in:
a.
$20 of trade diversion
b.
$40 of trade diversion
c.
$20 of trade creation
d.
$40 of trade creation
ANSWER:
d
POINTS:
1
DIFFICULTY:
Challenging
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
PREFACE NAME:
Figure 8.1
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
STATE STANDARDS:
United States – PA – DISC: Reading and interpreting g – DISC: Reading and interpreting
graphs
TOPICS:
Effects of a Regional Trading Arrangement
KEYWORDS:
BLOOM’S: Analyze
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
40. In 1989 Canada and the United States agreed to implement a (an) ____ over a ten year period.
a.
Customs union
b.
Common market
c.
Free trade area
d.
Economic union
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
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Page 18
41. In the United States, the proposed North American Free Trade Agreement was generally supported by:
a.
Labor unions
b.
Electronics firms
c.
Environmentalists
d.
Citrus producers
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
North American Free Trade Agreement
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
42. At the Maastricht Summit of 1991, European Union negotiators called for the pursuit of a:
a.
Free trade area
b.
Customs union
c.
Common market
d.
Monetary union
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
43. By removing discriminatory government procurement laws within the European Union, member nations hoped to
benefit from all of the following except:
a.
EU governments could purchase from the cheapest foreign suppliers
b.
Increased competition occurs as domestic firms compete with foreign firms previously shut out of the
domestic market
c.
Industries are restructured which permits surviving firms to achieve economies of scale
d.
Agricultural prices fall as more farmers are allowed to produce their commodities
ANSWER:
d
POINTS:
1
Copyright Cengage Learning. Powered by Cognero.
Page 19
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
44. Suppose that government procurement liberalization results in the U.K. government importing automobiles from
Germany, the low-cost EU manufacturer. Cost savings could result from all of the following except:
a.
Competition effect
b.
Scale-economy effect
c.
Protective effect
d.
Trade effect
ANSWER:
c
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
The European Union
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
45. Suppose that steel from Japan faces a 20 percent tariff in France and a 25 percent tariff in Italy, while France and Italy
maintain free trade between each other. France and Italy are therefore part of a (an):
a.
Free trade area
b.
Customs union
c.
Common market
d.
Economic union
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
Copyright Cengage Learning. Powered by Cognero.
Page 20
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
46. Suppose that Mexico and Canada form a free-trade area and Canada begins importing steel from Mexico rather than
from Germany. There occurs:
a.
Trade diversion
b.
Trade creation
c.
Trade destruction
d.
Trade exhaustion
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Remember
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
47. Suppose that Mexico and Canada form a free-trade area. Mexicans then decrease auto manufacturing and increase
imports of autos from Canada, while the Canadians decrease computer production and import more computers from
Mexico. This is an example of:
a.
Trade diversion
b.
Trade creation
c.
Trade destruction
d.
Trade exhaustion
ANSWER:
b
POINTS:
1
DIFFICULTY:
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
NATIONAL STANDARDS:
United States – BUSPROG: Promotion – BUSPROG: Analytic
United States – BUSPROG: Reflective Thinking
STATE STANDARDS:
United States – PA – DISC: International trade and fi – DISC: International trade and finance
TOPICS:
Types of Regional Trading Arrangements
KEYWORDS:
BLOOM’S: Understand
DATE CREATED:
6/22/2016 3:21 PM
DATE MODIFIED:
6/22/2016 3:21 PM
48. If the United States and Canada abolish all tariffs on each other’s goods and implement a common tariff on goods
imported from other countries, there occurs a (an):
a.
Free-trade area
b.
Customs union
c.
Common market