The difference between a free trade area and a customs union is that
a. countries of a free trade area set their own tariff policy with respect to members of the area while countries of a customs union have a uniform tariff policy withrespect to members of the union
b. governments receive custom duties (income) from all trade within the customs unioncountries while the governments of a free trade area don't
c. free trade area countries engage in reciprocity while countries of a customs unioncan, but need not engage in reciprocity
d. countries of a free trade area set their own tariff policy with respect to nonmembersof the area while countries of a customs union have a uniform tariff policy withrespect to nonmembers of the union
e. free trade area countries don't share a common border, such as Canada and Mexico,while custom union countries do
D
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The reason some insurance customers are more eager to purchase insurance is
a. they are more risk averse b. they are less risk averse c. they have a greater risk of making a claim d. A and C
For economists, conducting experiments is often difficult and sometimes impossible
a. True b. False Indicate whether the statement is true or false
If country A exports good X to country B and country B exports good Y to country A, it is most likely that
A. A has an absolute advantage in the production of good X. B. B is producing less of good Y than in the no-trade case. C. B has a comparative advantage in the production of good Y. D. the opportunity cost of domestic production of good Y for country A is lowered with trade.
The increase in demand for iPad tablet computers can be explained by:
A. An increase in the technology used to produce iPads, making the supply of iPads increase B. An increase in the price of laptop computers, making their MU/P decrease C. The enhanced versatility and storage capacity of iPads, making their MU/P increase D. An increase in the income of buyers, making the demand for iPads increase