Question 1

Environmental harm declines with rising income per person when:

Accepted Answer

A) the consumption of environment-friendly goods decline with an increase in income. 
B) with rise in income the increase in demand for better environment quality is larger than any adverse effects from rising production scale. 
C) the government imposes restrictions on the import of environment friendly technologies from abroad. 
D) the adverse effect of any increase in nominal GDP dominates any modest increase in demand for environmental quality. 
A) the consumption of environment-friendly goods decline with an increase in income. 
B) with rise in income the increase in demand for better environment quality is larger than any adverse effects from rising production scale. 
C) the government imposes restrictions on the import of environment friendly technologies from abroad. 
D) the adverse effect of any increase in nominal GDP dominates any modest increase in demand for environmental quality.

Question 2

In 1989 the United States passed a law against catching shrimp with nets that do not have turtle excluder devices. Four Asian countries filed a complaint with the WTO, and the WTO ruled that the U.S. policy violated WTO rules because:

Accepted Answer

A) protection of sea turtles was not a legitimate environmental purpose. 
B) one nation could not impose moral values on other nations as per WTO rules. 
C) sea turtles were not on the endangered species list. 
D) the policy did not apply equally to all exporting nations and did not recognize alternative ways to protect sea turtles. 
A) protection of sea turtles was not a legitimate environmental purpose. 
B) one nation could not impose moral values on other nations as per WTO rules. 
C) sea turtles were not on the endangered species list. 
D) the policy did not apply equally to all exporting nations and did not recognize alternative ways to protect sea turtles.

Question 3

For which of the following types of environmental pollution can we expect that the level of environmental harm would increase as per capita income increases?

Accepted Answer

A) Carbon dioxide emissions 
B) Lead pollution in water 
C) Carbon monoxide 
D) Arsenic in water 
A) Carbon dioxide emissions 
B) Lead pollution in water 
C) Carbon monoxide 
D) Arsenic in water

Question 4

When domestic production causes pollution that imposes an external cost on the country, the country may export the wrong products because:

Accepted Answer

A) the price of the product should be lower, which could lead to less production of the product. 
B) the price of the product should be lower, which could lead to no exports of the product. 
C) the price of the product should be higher, which could lead to more exports of the product. 
D) the price of the product should be higher, which could lead to no exports of the product. 
A) the price of the product should be lower, which could lead to less production of the product. 
B) the price of the product should be lower, which could lead to no exports of the product. 
C) the price of the product should be higher, which could lead to more exports of the product. 
D) the price of the product should be higher, which could lead to no exports of the product.

Question 5

Which of the following would you expect to lead to worsening environmental quality?

Accepted Answer

A) An export or production subsidy from the French government to French steel manufacturers 
B) Freer trade in capital equipment that incorporates environmentally friendly technologies 
C) An export subsidy for producers of clean technology for producing paper 
D) Freer trade that promotes production of manufactured goods in developing countries where environmental laws are strict 
A) An export or production subsidy from the French government to French steel manufacturers 
B) Freer trade in capital equipment that incorporates environmentally friendly technologies 
C) An export subsidy for producers of clean technology for producing paper 
D) Freer trade that promotes production of manufactured goods in developing countries where environmental laws are strict

Question 6

Which of the following is most likely to be allowed under WTO rules?

Accepted Answer

A) The United States decides to ban the consumption and production of cheese made from unpasteurized milk in order to guarantee that the food people eat is safe. 
B) The United States decides to ban the importation of foreign made cigarettes in order to reduce lung cancer in the United States, without putting any restriction on the sale of local cigarettes. 
C) Great Britain outlaws non-British cars in an effort to reduce emissions in England, Scotland, and Wales. 
D) Japan bans the importation of American rice because it is thought that American rice may not be as nutritious as Japanese rice. 
A) The United States decides to ban the consumption and production of cheese made from unpasteurized milk in order to guarantee that the food people eat is safe. 
B) The United States decides to ban the importation of foreign made cigarettes in order to reduce lung cancer in the United States, without putting any restriction on the sale of local cigarettes. 
C) Great Britain outlaws non-British cars in an effort to reduce emissions in England, Scotland, and Wales. 
D) Japan bans the importation of American rice because it is thought that American rice may not be as nutritious as Japanese rice.

Question 7

A rise in income unambiguously leads to less pollution.

Accepted Answer

A) True 
 B)False

Question 8

For which of the following environmental pollutions would we expect that an inverted-U relationship would exist between environmental harm and per capita income?

Accepted Answer

A) Carbon dioxide emissions 
B) Lead pollution in water 
C) Sulfur dioxide in air 
D) Airborne heavy particles 
A) Carbon dioxide emissions 
B) Lead pollution in water 
C) Sulfur dioxide in air 
D) Airborne heavy particles

Question 9

The combined size and income effects of the Uruguay Round tend to:

Accepted Answer

A) decrease nitrogen dioxide emissions in European Union and Japan. 
B) increase carbon monoxide emissions in developed countries. 
C) increase pollution levels in developing countries. 
D) decrease sulfur dioxide and carbon monoxide emissions in developing countries. 
A) decrease nitrogen dioxide emissions in European Union and Japan. 
B) increase carbon monoxide emissions in developed countries. 
C) increase pollution levels in developing countries. 
D) decrease sulfur dioxide and carbon monoxide emissions in developing countries.

Question 10

Which of the following would you expect to lead to improved environmental quality?

Accepted Answer

A) An export or production subsidy from the French government to French wheat producers 
B) A voluntary export restraint on the part of Japanese auto producers 
C) An export subsidy for producers of clean technology for producing paper 
D) Freer trade that promotes production of manufactured goods in developing countries where environmental laws are lax 
A) An export or production subsidy from the French government to French wheat producers 
B) A voluntary export restraint on the part of Japanese auto producers 
C) An export subsidy for producers of clean technology for producing paper 
D) Freer trade that promotes production of manufactured goods in developing countries where environmental laws are lax

Question 11

Suggest a remedial measure for each of the following externalities if: (1) the whole world had only one government and (2) a particular nation is harmed and is acting alone. The individual situations are as follows:
a.Pollution from domestic consumption
b.Pollution from foreign consumption
c.Pollution from world consumption

Accepted Answer

A.If the whole world had only one govern

Question 12

When the Japanese imposed a VER on automobile exports in the 1980s, the environmental conditions in the U.S. improved.

Accepted Answer

A) True 
 B)False

Question 13

Non-smokers being exposed to involuntary or passive smoking is an example of:

Accepted Answer

A) transboundary pollution. 
B) moral hazard. 
C) a situation where social marginal benefit exceeds social marginal cost. 
D) a negative externality. 
A) transboundary pollution. 
B) moral hazard. 
C) a situation where social marginal benefit exceeds social marginal cost. 
D) a negative externality.

Question 14

As a result of the Uruguay Round, production of _____ goods increased in industrialized countries and polluting emissions in these countries _____ as a result.

Accepted Answer

A) capital and skill-intensive; decreased 
B) capital and skill-intensive; increased 
C) unskilled-labor-intensive; decreased 
D) unskilled-labor-intensive; increased 
A) capital and skill-intensive; decreased 
B) capital and skill-intensive; increased 
C) unskilled-labor-intensive; decreased 
D) unskilled-labor-intensive; increased

Question 15

"A country can be left worse off as a result of free trade and/or exporting the wrong products if there are no policies that force market decision-makers to internalize the costs associated with the production of certain goods and services." Do you agree or disagree with the statement? Illustrate your answer with the help of relevant diagrams.

Accepted Answer

Consider the case of an industry whose p

Question 16

Give a brief account of each of the following international agreements with respect to the environment. What externalities do they cover? Have each of these agreements been successful?
a.CITES
b.Montreal Protocol
c.Kyoto Protocol

Accepted Answer

A.The Convention on International Trade

Question 17

Free trade may lead to more pollution because:

Accepted Answer

A) with free trade the size of the economy increases resulting in higher production and consumption. 
B) competition among nations invariably leads to less restrictive pollution standards. 
C) the countries may not specialize in the production of the goods in which they have comparative advantage. 
D) domestic products are produced using cleaner production techniques than imported products. 
A) with free trade the size of the economy increases resulting in higher production and consumption. 
B) competition among nations invariably leads to less restrictive pollution standards. 
C) the countries may not specialize in the production of the goods in which they have comparative advantage. 
D) domestic products are produced using cleaner production techniques than imported products.

Question 18

Which of the following establishes international cooperation to prevent international trade from endangering the survival of species?

Accepted Answer

A) The Uruguay Round 
B) The CITES 
C) The Montreal Protocol 
D) The Kyoto Protocol 
A) The Uruguay Round 
B) The CITES 
C) The Montreal Protocol 
D) The Kyoto Protocol

Question 19

Suppose the U.S. government is about to ban the importation of Nicaraguan steel. The reason cited is that the production of steel contributes to substantial environmental pollution. At the same time, the U.S. government offers subsidies to domestic steel producers. Under such a situation WTO rules permit the U.S. government to implement the ban on the import of Nicaraguan steel

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is true?

Accepted Answer

A) Shifts toward freer trade are responsible for the majority of the increase in carbon dioxide emissions. 
B) Free trade is inherently unfair and anti-environment. 
C) Relocation of firms to take advantage of lax environmental laws is small. 
D) Production of commodities like textiles increases in the industrialized countries due to free trade. 
A) Shifts toward freer trade are responsible for the majority of the increase in carbon dioxide emissions. 
B) Free trade is inherently unfair and anti-environment. 
C) Relocation of firms to take advantage of lax environmental laws is small. 
D) Production of commodities like textiles increases in the industrialized countries due to free trade.

Exam 13: Trade and the Environment

Environmental harm declines with rising income per person when:

In 1989 the United States passed a law against catching shrimp with nets that do not have turtle excluder devices. Four Asian countries filed a complaint with the WTO, and the WTO ruled that the U.S. policy violated WTO rules because:

For which of the following types of environmental pollution can we expect that the level of environmental harm would increase as per capita income increases?

When domestic production causes pollution that imposes an external cost on the country, the country may export the wrong products because:

Which of the following would you expect to lead to worsening environmental quality?

Which of the following is most likely to be allowed under WTO rules?

A rise in income unambiguously leads to less pollution.

For which of the following environmental pollutions would we expect that an inverted-U relationship would exist between environmental harm and per capita income?

The combined size and income effects of the Uruguay Round tend to:

Which of the following would you expect to lead to improved environmental quality?

When the Japanese imposed a VER on automobile exports in the 1980s, the environmental conditions in the U.S. improved.

Non-smokers being exposed to involuntary or passive smoking is an example of:

As a result of the Uruguay Round, production of _____ goods increased in industrialized countries and polluting emissions in these countries _____ as a result.

Give a brief account of each of the following international agreements with respect to the environment. What externalities do they cover? Have each of these agreements been successful? a.CITES b.Montreal Protocol c.Kyoto Protocol

Free trade may lead to more pollution because:

Which of the following establishes international cooperation to prevent international trade from endangering the survival of species?

Which of the following statements is true?

International Economics Is Different

The Basic Theory Using Demand and Supply

Why Everybody Trades: Comparative Advantage

Trade: Factor Availability and Factor Proportions Are Key

Who Gains and Who Loses From Trade

Scale Economies, Imperfect Competition, and Trade

Growth and Trade Part II: Trade Policy

Analysis of a Tariff

Nontariff Barriers to Imports

Arguments for and Against Protection

Pushing Exports

Trade Blocs and Trade Blocks

Trade Policies for Developing Countries

Multinationals and Migration: International Factor Movements

Payments Among Nations

The Foreign Exchange Market

Forward Exchange and International Financial Investment

What Determines Exchange Rates

Government Policies Toward the Foreign Exchange Market

International Lending and Financial Crises

How Does the Open Macroeconomy Work

Internal and External Balance With Fixed Exchange Rates

Floating Exchange Rates and Internal Balance

National and Global Choices: Floating Rates and the Alternatives

Filters

As a result of the Uruguay Round, production of _ goods increased in industrialized countries and polluting emissions in these countries _ as a result.