Exam #2 (Fall 2015) 3/16 6.In the exporting country, an export subsidy will:
7.One reason why consumers are unlikely to be too upset about most tariffs is because:
8.If a country protects an industry because it believes that there are positive externalities in the production process, it is asserting that the free market will: a.Produce less than is optimal from society’s point of view. b.Produce more than is optimal from society’s point of view. c.Produce the optimal amount from society’s point of view but charge too low a price. d.Produce the optimal amount from society’s point of view but charge too high a price.
9.Developing countries are usually unwilling to negotiate over labor standards because:
10.The claim that lower environmental standards in foreign countries reduce industrial competitiveness for high environmental standard countries is on solid theoretical ground because: