Describe the potential benefits and the potential costs to global trade of the tremendous growth in regional trade agreements
What will be an ideal response?
A regional trade agreement creates preferential treatment for nations that are participants, which violates the idea of MFN status in multilateral agreements, where nations agree to treat all participants the same. The WTO recognizes that regional agreements destroy some opportunities for trade by making non-members face higher barriers than members of the regional agreement. But it believes that they create more trade than they divert, and the regional agreements allow nations to try out arrangements that may later be adopted more broadly.
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The elasticity of supply measures the sensitivity of
A) supply to changes in costs. B) quantity supplied to quantity demanded. C) quantity supplied to a change in price. D) price to changes in supply.
An efficiency wage is
A) lower than a living wage. B) unfair to employers. C) a wage rate above the employees' opportunity cost. D) unlikely to be paid when monitoring is available.