The European Union is primarily intended to permit a. Countries to adopt tariffs on imports. Agricultural commodity cartel within the group.

1. The European Union is primarily intended to permit

a. Countries to adopt tariffs on imports.

b. Agricultural commodity cartel within the group.

c. The adoption of export tariffs for revenue purposes.

d. Free movement of resources and products among member nations.

2. Which of the following represents the stage where economic integration is most complete.

               a. Economic Union.

               b. Customs Union.

               c. Monetary Union.

               d. Common Market.

3. Which of the following represents the stage where economic integration is least complete.

               a. Free Trade Area.

               b. Monetary Union.

               c. Common Market.

               d. Custom Union.

4. Customs Union theory reasons that the formation of a customs union will decrease members' real welfare when the:

               a. Trade diversion effect exceeds the trade creation effect.

               b. Trade production effect exceeds the trade consumption effect.

               c. Trade consumption effect exceeds the trade production effect.

               d. Trade creation effect exceeds the trade diversion effect.

5. Which economic integration scheme is solely intended to abolish trade restrictions among member countries, while setting up common tariffs against non -members.

               a. Economic Union.

               b. Common Market.

               c. Free Trade Area.

               d. Customs Union.

6. Assume that the formation of customs union turn out to include the lowest cost world producer of the product in question. Which effect would not occur for the participating countries.

               a. Trade creation production effect.

               b. Trade creation consumption effect.

               c. Trade diversion.

               d. Scale economies and competition.

7. Which organization of nations permits free trade among its members in industrial goods, while each member maintains freedom in its trade policies toward non-member countries.

               a. European Union.

               b. World Trade Organization (WTO).

               c. NAFTA.

               d. Council for Mutual Economic Assistance.