In the following table, indicate whether each statement about regional trade agreements is true or false. Statement Under regional trade agreements, several countries eliminate tariffs among themselves but maintain tariffs against countries outside the region. Regional trade agreements are not permitted under GATT. The countries of the European Union (EU) maintain a common schedule of tariffs with countries outside the EU. A good that Mexico imports from China can be shipped duty-free to the United States. Countries that enter into a free trade area agreement keep the tariffs that they formerly had with the rest of the world. The countries within a customs union agree to a common schedule of tariffs with countries outside the union. True O O O O O O False O O O O O O

In the following table, indicate whether each statement about regional trade agreements is true or false. Statement Under regional trade agreements, several countries eliminate tariffs among themselves but maintain tariffs against countries outside the region. Regional trade agreements are not permitted under GATT. The countries of the European Union (EU) maintain a common schedule of tariffs with countries outside the EU. A good that Mexico imports from China can be shipped duty-free to the United States. Countries that enter into a free trade area agreement keep the tariffs that they formerly had with the rest of the world. The countries within a customs union agree to a common schedule of tariffs with countries outside the union. True O O O O O O False O O O O O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In intentional trade negotiations, it is very common for a country's trade representative to threaten to enact protectionist policy that include: tariffs, quotas, quota-tariff, national security restrictions, and domestic content requirements. Define what each of these protection policies. Explain why quotas are usually the least creditable threat. If the trade represents a small importing country, would it make economic sense to threaten tariffs? Why or Why not?
Describe benefits from international trade.
President Trump increased tariffs on some goods from China. China retaliated by increasing tariffs on some U.S. goods. If free trade is the ideal, what was President Trump’s goal when increasing tariffs? Do you think this was an effective strategy? Why or why not?
A small country imports T-shirts. With free trade at a world price of $10, domestic production is 10 million T-shirts and domestic consumption is 42 million T-shirts. The country's government now decides to impose a quota to limit T-shirt imports to 20 million per year. With the import quota in place, the domestic price rises to $12 per T- shirt and domestic production rises to 15 million T-shirts per year. The quota on T- shirts causes domestic consumers to A) gain $7 million. B) lose $7 million. C) lose $70 million. D) lose $77 million
What was the General Agreement on Tariffs and Trade (GATT)? List its main accomplishments.
Whatever can be done by a tariff can be done by a quota.
12. If the free trade price is lIP and this country imposes a trade tariff of $3, what will be the resulting net welfare loss to the economy? a)$3 b)$27 C)$13.5 d)$40.5 e)$9 13. if the free trade price is IP and this country imposes an import quota of 6 units, what will be the welfare loss to this economy? a)$3 b)$27 c)$13.5 d)$40.5 e)$18
Argentina and Brazil are considering the potential gains of trade. There is only one factor of production: labor. There are only two goods being produced in either economy: coffee and wine. Argentina can employ 10,000 hours of labor per month. Producing 1 lb. of coffee requires 2 hours of labor, and producing 1 bottle of wine requires 4 hours of labor, in Argentina. Similarly, Brazil can employ 10,000 hours of labor per month. Producing 1 lb. of coffee requires 1 hour of labor, and producing 1 bottle of wine requires 5 hours of labor, in Brazil. A). Which country has an absolute advantage in the production of coffee? B). Which country has an absolute advantage in the production of wine? C). Draw the Production Possibilities Frontier for the two countries.
Identify which trade flows each international trade theory explains. Please choose at least one from trade partners, and one from industries Heckscher-ohlin theory Trade partners: between two developed or between developed and developing Industries: trade in the same industry or trade between different industries New Trade theory Trade partners:between two developed or between developed and developing Industries: Trade in same industry or trade between different industries Product Life cycle theory trade partners: between two developed or between developed and developing Industries: trade in same industry or trade between different industries
In reference to tariffs, What is the reason that U.S. imposes tariffs? why the U.S. imposes tariffs on imports?
Which organization meets regularly to establish rules and settle disputes related to international trade? The United Nations Commission on Trade Law The United Nations Conference on Trade and Development The World Trade Organization The Federal Reserve Board U.S. businesses are demanders of foreign currencies because they need them to produce goods and services exported to foreign countries pay for goods and services imported from foreign countries receive interest payments from foreign governments receive interest payments from foreign businesses.
Trade, tariffs, and protectionism. a) Explain, with aid of a diagram, the welfare effects of a tariff on the importing country.