1Countries like Argentina and Australia protect agriculture less heavily than other agricultural producers because
Select one:
a it is illegal under WTO rules
b they do not have significant agricultural sectors
c they are trying to help other countries
d they have a large comparative advantage in production
2Direct subsidies to agriculture, whether they are export subsidies or production subsides, are viewed as harmful because of all the following reasons EXCEPT
Select one:
a they can lead to dumping of surplus production
b they encourage overconsumption through low market prices
c they lead to overproduction
d they crowd out imports
3Market failures are less likely to occur whenever
Select one:
a social returns are greater than private returns
b private returns are greater than social returns
c new firms can easily attract start-up capital
d the free market produces less than what is socially optimal
4Internal economies of scale means that
Select one:
a firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market
b expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output
c consumers will have less choices once trade begins, because firms will be squeezed out of the market
d firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs
5Trade measures are usually not the best way of addressing problems such as pollution and child labor because
Select one:
a trade measures are not effective in reducing pollution
b it is more efficient to address these problems at the production and consumption level
c the governments of high-income countries are not interested in sanctioning pollution and child labor
d the WTO prohibits most trade sanctions
6Which of the following is NOT a true statement?
Select one:
a There have been significant reductions in trade barriers over the last 60 years
b Trade barriers are usually a good way of protecting jobs
c Economists generally favor further reductions in trade barriers
d There are diminishing returns to trade negotiations