Which of the Following Statements Is True of Free Trade

question 51

Multiple Choice

Which of the following statements is true of free trade zones?

• A)Central American countries and the Dominican Republic (CAFTA-DR)is a free trade agreement between the U.S.and Europe that has resulted in greater exports of U.S.beef to Europe.
• B)North American Free Trade Agreement (NAFTA)is a free trade agreement between the U.S.,Canada,and Mexico that has reduced illegal migration of Mexicans to the U.S.
• C)Association of Southeast Asian nations (ASEAN)is a free trade agreement between the U.S.and a group of South Asian countries that has led to an increase in U.S.outsourcing to countries like India.
• D)Mercosur is a free trade association of Latin American countries that aims to increase export subsidies and domestic content requirements in each member country.
• E)The Trans-Pacific Partnership is a free trade association of South Africa and its four neighbouring countries.

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Definitions:

Additional Unit

The next unit of product or service that is being considered for production or consumption.

Marginal Cost

Incremental expense incurred from the production of one additional unit of a good.

Average Total Cost

The total costs of production divided by the total output, indicating the average cost per unit of output.

Total Cost

The combined total of expenses involved in making goods or services, including costs that do not change and those that do.