Microeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859484
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 21, Problem 5E
To determine
Difference between customs union and free trade area.
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Students have asked these similar questions
Explain differences between a Customs Union and a Free Trade Agreement, i.e EU and NAFTA? Briefly
Which feature is found in a customs union but not a free trade area? (Pick either a,b,c, or d)
a) uniform direct tax rates
b) uniform indirect tax rates
c) a common external tariff
d) a common currency
WHAT IS ADDED TO A CUSTOMS UNION SO THAT AN AREA BECOMES A
COMMON MARKET –
WHAT IS ADDED TO A COMMON MARKET SO THAT AN AREA BECOMES A
2. POLITICAL UNION –
Chapter 21 Solutions
Microeconomics (MindTap Course List)
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- What distinguishes a customs union from a free trade area? What distinguishes a common market from a customs union?arrow_forwardWhy is it likely that ‘FTAs (free trade areas) will remain FTAs, unless the process of integration begins at least with a CU (customs union)’?arrow_forwardc) During the Great Depression, Congress passed the Smoot-Hawley Tariff, using the "Create Domestic Jobs" argument for trade restriction. In actuality, job loss in our export industries was greater than job gains in our import industries. Why?arrow_forward
- How do you think trade between the United States and a poorer nation affects the workers in the poorer nation?arrow_forwardList and briefly describe the principal restrictions that may be applied to a nation’s imports.arrow_forwardDiscuss how international trade influences the job market. What are the opportunity costs to protectionism? Explain how international trade impacts wages, labor standards, and working conditions.arrow_forward
- Suppose a limited number of WTO member countries consider entering a customs union with zero tariffs within the union and common tariffs on imports from countries outside of the union. What will be the consequence for trade and welfare in the world? Explain two different effects of the new customs union using the gravity model.arrow_forwardWhat Is North American Free Trade Agreement (NAFTA)?arrow_forwardwhat is the impact of trade barriers on globalizationarrow_forward
- If trade barriers hurt the average worker in an economy (due to lower wages), why does government create trade barriers?arrow_forwardName and define three policy tools for enacting protectionism.arrow_forwardYou just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?arrow_forward
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