Trading blocs
Question 1 - short questions
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Distinguish between free trade areas (FTAs) and customs unions.
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Why do you think trading blocs have come to dominate world trade over the last 40 years?
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What do you think are the two main advantages and two main disadvantages of trading blocs?
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Outline the likely economic effects on the UK of a decision to withdraw from the EU.
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Outline the role of the WTO in terms of trading blocs.
Question 2
In May 2009 the US chip manufacturer, Intel, was fined a record £950m by the European Commission for abusing its dominant position and illegally engaging in anti-competitive behaviour against another US based chip manufacturer, AMD (Advanced Micro Devises). Intel was found guilty of offering generous rebates to a number of computer manufacturers for purchasing their chips, including Acer, Dell, and HP. Intel has roughly 70% of the global market share of chip production.
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To what extent is Intel a monopoly supplier?
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With reference to the data, explain what is meant by 'abuse of dominant position'.
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Evaluate the effectiveness of fines as a deterrents to anti-competitive behaviour.
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To what extent could it be argued that European competition policy is simply an example of protectionism?