Which of the Following Supports the Economic Case for Regional

question 64

Multiple Choice

Which of the following supports the economic case for regional economic integration?

• A)International institutions such as the World Trade Organization have been moving the world away from a free trade regime.
• B)The greater the number of countries involved in a free trade agreement,the fewer the perspectives that must be reconciled.
• C)Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.
• D)It is difficult to establish a free trade and investment regime among a limited number of adjacent countries as compared to the world community.
• E)Since most governments do not intervene,unrestricted free trade and FDI have become a reality.

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Definitions:

Diseconomies of Scale

Diseconomies of scale occur when a firm's costs per unit increase as the scale of its output increases, often due to inefficiencies that arise from managing a larger organization.

Average Fixed Costs

Costs that do not change with the level of output and are spread over the units of output, thus decreasing per unit as production increases.

Output Increases

Output increases refer to a situation where there is a rise in the quantity of goods or services produced by a company or within an economy.

Total Product

The total output or production achieved by a firm from a given amount of inputs.