Questions to ECO 365 Week 5 Knowledge Check are as follow:
1. What problem do economists see with free trade areas such as
NAFTA 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 is called
• 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
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
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