If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?
Correct answer: C. customs union
- A. common market
- B. free trade area
- C. customs union
- D. federation
Explanation
A customs union removes trade barriers among its members and applies a common external tariff to non-members. A free-trade area removes internal barriers but allows each member to set its own external tariffs.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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