ECO 365 Week 5 Knowledge Check NEW
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1. What problem do economists see with free trade areas such as NAFTA and the European Union?
A. They tend to lead to free trade rather than fair trade.
B. They can lead to regional trading blocs then restrict trade.
C. They lead to globalization.
D. 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. a tariff-free zone
B. a most-favored nation agreement
C. an autarky
D. a free trade association
3. Mexico has a comparative advantage in producing corn
A. if its opportunity cost of producing corn is higher than the opportunity cost in other countries
B. if its opportunity cost of producing corn is the same as the opportunity cost in other countries
C. if its opportunity cost of producing corn is lower than opportunity cost in other countries
D. regardless of the opportunity cost in other countries
4. Workers in education, health care, and government sectors have
A. seen their incomes fall just like in manufacturing
B. been mostly hurt from globalization
C. benefited from globalization in terms of lower consumer prices
D. been hurt because the sector has been shrinking
5. In the United States globalization has
A. played a significant role in growing income disparity because some sectors have benefited and others have not
B. played little role in growing income disparity because all Americans are consumers who have enjoyed lower prices
C. played a significant role in growing income disparity because foreign workers' incomes have risen
D. 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
A....