ECO 365 week 5 Knowledge Check (1)

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ECO 365 Week 5 Knowledge Check
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1. What problem do economists see with free trade
areas such asNAFTA and the European Union?
They tend to lead to free trade rather than fair
trade. They can lead to regional trading blocs
then restrict trade. They lead to
globalization. They encourage countries to rely
on others rather than being self-sufficient   2.
A group of countries that allows free trade among
its members and puts up common barriers against
all other countries' goods isCalled a
tariff-free zone a most-favored nation
agreement an autarky a free trade association
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3. Mexico has a comparative advantage in
producing corn if its opportunity cost of
producing corn is higher than the opportunity
cost in other countries if its opportunity cost
of producing corn is the same as the opportunity
cost in other countries if its opportunity cost
of producing corn is lower than opportunity cost
in other countries regardless of the
opportunity cost in other countries   4. Workers
in education, health care, and government sectors
have seen their incomes fall just like in
manufacturing been mostly hurt from
globalization benefited from globalization in
terms of lower consumer prices been hurt
because the sector has been shrinking
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5. In the United States globalization has
played a significant role in growing income
disparity because some sectors have benefited and
others have not played little role in growing
income disparity because all Americans are
consumers who have enjoyed lower prices played
a significant role in growing income disparity
because foreign workers' incomes have risen
played little role in growing income disparity
because while some jobs were lost, the gain in
jobs balanced out those that were lost   6. Most
economists oppose free trade favor free
trade have no opinion on free trade Would
prefer to have no trade with other nations
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7. World trade declined in the 1930s. Which of
the following is the best explanation of that
decline? World income shrank and trade
restrictions increased. World income shrank,
but there were few changes in tradeRestrictions
Trade restrictions increased, but there was
little change in world income The incomes of
most nations increased, allowing them to become
more self-sufficient.   8. As a country develops
economically, what changes usually take place in
the goods it exports? There is little change
because comparative advantage does not change.
Raw materials and agricultural products decline
in importance and are replaced by services and
manufactured goods. Services and manufactured
goods decline in importance and are replaced by
raw materials and agricultural products.
Exports go from being diversified to being
specialized in whatever the country finds to be
its comparative advantage.  
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9. When a U.S. company establishes a call center
in India that answers its customer service calls,
the United States is outsourcing, a form of
importing services outsourcing, a form of
exporting services in sourcing, a form of
importing services in sources, a form of
exporting services
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