Week 4- International Trade Problem Set

Question 1

When a country takes a UNILATERAL approach to free trade, it removes___

Answer 1

Trade restriction on its own.

Question 2

Problem w/ the protection as a bargain chip argument for trade restriction is IF it fails___

Answer 2

Tthe country faces a choice between 2 bad options.

Question 3

Quota___

Answer 3

Limited on quantity of imports.

Question 4

When a country takes multilateral approach on free trade, it reduces___

Answer 4

It’s trade restriction while other countries do the same.

Question 5

Tariff is a___

Answer 5

Tax on imported goods.

Question 6

World price___

Answer 6

Price of good that prevails in a world market.

Question 7

General Agreement on Tariffs and Trade (GATT)___

Answer 7

Response to high tariff during Great Depression.

Question 8

Economies of scale defined as____

Answer 8

Some goods can be produced at low cost if they produced in large quantities.

Question 9

NAFTA reduces____

Answer 9

Trade restrictions among NA nations.

Question 10

Efficiency argument is___

Answer 10

Not a common advanced argument for trade restrictions.

Question 11

Price of sugar in international market___

Answer 11

World price of sugar.

Question 12

“Florida grows orange. Texas pumps oil, and California makes wine”___

Answer 12

As a confirmation of the virtues of free trade.