Question

6.

Dumping is defined as

	selling a good abroad at prices below its cost of production or below the price charged in the home market.
	selling a good abroad at prices above the costs of the firms in the foreign countries.
	exporting goods that are sources of pollution.
	exporting goods that are of inferior quality.

Question 7

Free trade policies may lead to

	some labor sectors experiencing some short-term job loss.
	a decrease in world output.
	price increases in world markets.
	none of the above.

Question 8

A quota is

Question 8 options:

	a tariff imposed on goods that are dumped in the country.
	a market-imposed balancing factor that keeps prices of imports and exports in equilibrium.
	a law that prevents ecologically damaging goods from being imported into a country.
	a government-imposed restriction on the quantity of a specific good that can be imported.

Question 9

A tariff is a

	voluntary limit on sales of a foreign product in the domestic market.
	regulation of the quality of a foreign product sold in the domestic market.
	legal limit on sales of a foreign product in the domestic market.
	tax on sales of a foreign product in the domestic market.

Question 10

The World Trade Organization is a successor organization to the

	World Bank.
	International Court of Justice.
	United Nations.
	GATT.

Answer 1

6) First option. Dumping is said to be existing in a market where a particular firm sells its product at a price below its marginal cost in order to oust local competition. Since cost is not recovered, the activity is compared as dumping the goods

7) First option. Free trade increases world production but does not increase the price for all sectors. This implies that sectors where price is reduced, there is a reduced production and a possible job loss

8) Last option. Similar to a tariff, it is a import restricting instrument but here the imported good is not fined, instead its amount is kept fixed at a desired level to benefit local producers

9) Last option

10) Last option