EC 340

Problem Set #6 - Politics, the Environment, and Trade

Due by the end of class on March 16, 1998.

1. Environmentalists worry that GATT and the WTO pose a threat to environmental quality. How does GATT constrain environmental policy options?

2. What is an externality and why can they result in an inefficient level of production or consumption?

3. How might keiretsu explain the closed nature of Japan's trade structure?

4. According to Paul Krugman's article, "Protectionism: Try It, You'll Like It", why are the beneficiaries of trade barriers more effective politically than the victims? Why then is U.S. trade relatively free?

David A. Latzko
318 COB
Department of Business and Economics
Wilkes University
Wilkes-Barre, PA 18766
phone: (717) 408-4718
fax: (717) 408-4917