When Products from High-Cost Suppliers Within a Customs Union Replace

question 108

Multiple Choice

When products from high-cost suppliers within a customs union replace imports from a low-cost nation that is NOT a member of the customs union, there exist(s)

• A) dynamic welfare losses.
• B) dynamic welfare gains.
• C) trade creation.
• D) trade diversion.

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Definitions:

Identical Twins

Twins who originated from the same fertilized egg, sharing all of their genes and typically having very similar appearances.

Fraternal Twins

Twins who develop from separate eggs and therefore are genetically distinct, although born at the same time.

Humanlike Language

Forms of communication that exhibit features of natural human language, including grammar, syntax, and the capacity to convey complex ideas and emotions.

Primates

An order of mammals that includes humans, apes, monkeys, and prosimians, characterized by their large brains, forward-facing eyes, and complex social structures.