Question 1

An imperfectly competitive firm has the following demand curve: Q = 100 - 2P. What is marginal revenue equal to when P = 40?

Accepted Answer

The answer of An imperfectly competitive firm has the following...

Question 2

What is the nature of the proximity-concentration tradeoff that firms have to deal with then making decisions regarding foreign direct investment?

Accepted Answer

The answer of What is the nature of the proximity-concentration...

Question 3

An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice

Accepted Answer

A)  the two countries must engage in international trade with each other. 
B)  each country's marginal cost must equal that of the other country. 
C)  the monopoly must lower prices in order to sell more. 
D)  they must combine to become a multinational corporation. 
E)  the marginal cost of this industry must equal marginal revenue in the other.

Question 4

An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average fixed cost equal to when Q = 10?

Accepted Answer

The answer of An imperfectly competitive firm has the following...

Question 5

If the market for products produced by firms in a monopolistically competitive industry becomes ________, then there will be ________ firms and each firm will produce ________ output and charge a ________ price.

Accepted Answer

A)  larger; fewer; more; higher 
B)  larger; more; less; higher 
C)  larger; fewer; more; lower 
D)  larger; more; more; lower 
E)  larger; more; more; higher

Question 6

A monopoly firm will maximize profits by producing where

Accepted Answer

A)  total revenue from domestic and foreign sales is maximized. 
B)  marginal revenue is the same in domestic and foreign markets. 
C)  prices are the same in domestic and foreign markets. 
D)  marginal revenue is higher in the domestic market. 
E)  marginal revenue is higher in foreign markets.

Question 7

In the model of monopolistic competition, an increase in industry output will ________ producers of higher-priced goods and ________ producers of lower-priced goods.

Accepted Answer

A)  harm; benefit 
B)  benefit; benefit 
C)  benefit; harm 
D)  benefit; have no effect on 
E)  harm; harm

Question 8

A monopoly firm engaged in international trade will

Accepted Answer

A)  equate marginal costs with the highest price the market will bear. 
B)  equate average to local costs. 
C)  equate marginal costs with foreign marginal revenues. 
D)  equate marginal costs with marginal revenues in both domestic and foreign markets. 
E)  equate marginal costs with the relative world prices.

Question 9

International trade based on external scale economies in both countries is likely to be carried out by

Accepted Answer

A)  a large number of oligopolists in each country. 
B)  a relatively large number of price competing firms. 
C)  a relatively small number of price competing firms. 
D)  a relatively small number of imperfect competitors. 
E)  monopolists in each country.

Question 10

The simultaneous export and import of widgets by the United States is an example of

Accepted Answer

A)  inter-industry trade. 
B)  imperfect competition. 
C)  the effect of a monopoly on international trade. 
D)  intra-industry trade. 
E)  increasing returns to scale.

Question 11

A firm in long-run equilibrium under monopolistic competition will earn

Accepted Answer

A)  positive oligopoly profits because each firm sells a differentiated product. 
B)  zero economic profits because of free entry. 
C)  negative economic profits because it has economies of scale. 
D)  positive economic profit if it engages in international trade. 
E)  positive monopoly profits because each sells a differentiated product.

Question 12

Trade without serious income distribution effects is most likely to happen

Accepted Answer

A)  in simple manufactures trade between developing countries. 
B)  in sophisticated manufactures trade between rich countries. 
C)  in sophisticated manufactures trade between rich and poor countries. 
D)  in agricultural trade between rich countries. 
E)  in labor-intensive industries like clothing.

Question 13

A firm's foreign direct investment. decisions are, in the case of horizontal FDI, strongly influenced by ________ and, in the case of vertical FDI, strongly influenced by ________.

Accepted Answer

A)  materials costs; labor costs 
B)  trade costs; production costs 
C)  labor costs; trade costs 
D)  production costs; trade costs 
E)  production costs; materials costs

Question 14

An imperfectly competitive firm has the following demand curve: Q = 100 - 2P. What is marginal revenue equal to when P = 30?

Accepted Answer

The answer of An imperfectly competitive firm has the following...

Question 15

-Refer to above figure. While selling exports it would also maximize its domestic sales by equating its marginal (opportunity) cost to its marginal revenue of $5. How much steel would the firm sell domestically, and at what price?

Accepted Answer

The answer of 
-Refer to above figure. While selling exports...

Question 16

Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in

Accepted Answer

A)  immiserizing trade. 
B)  inter-industry trade. 
C)  intra-industry trade. 
D)  Heckscher-Ohlinean trade. 
E)  price competition.

Question 17

In the model of monopolistic competition, if firms have ________ average cost curves, then opening trade will cause ________ firms to ________ the industry.

Accepted Answer

A)  different; more efficient; enter 
B)  symmetric; less efficient; enter 
C)  different; less efficient; exit 
D)  symmetric; less efficient; exit 
E)  symmetric; more efficient; enter

Question 18

In the model of monopolistic competition, trade costs between countries cause

Accepted Answer

A)  marginal costs of exported goods to exceed the marginal costs of goods sold domestically. 
B)  all firms that can earn a profit on domestic sales to export their goods at higher prices. 
C)  countries to negotiate the elimination of trade costs by mutual subsidization of trade. 
D)  marginal costs of goods sold domestically to exceed the marginal costs of exported goods. 
E)  all firms that can earn a profit on domestic sales to export their goods at lower prices.

Question 19

In the model of monopolistic competition, trade costs between countries cause

Accepted Answer

A)  marginal costs of goods sold domestically to exceed the marginal costs of exported goods. 
B)  countries to negotiate the elimination of trade costs by mutual subsidization of trade. 
C)  prices of goods sold domestically to exceed the prices of exported goods. 
D)  some firms that can earn a profit on domestic sales to refrain from exporting their goods. 
E)  all firms that can earn a profit on domestic sales to export their goods at higher prices.

Question 20

Firms that produce ________ products must be ________ competitive.

Accepted Answer

A)  differentiated; imperfectly 
B)  differentiated; perfectly 
C)  exported; imperfectly 
D)  standardized; imperfectly 
E)  standardized; perfectly

Exam 8: Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

An imperfectly competitive firm has the following demand curve: Q = 100 - 2P. What is marginal revenue equal to when P = 40?

What is the nature of the proximity-concentration tradeoff that firms have to deal with then making decisions regarding foreign direct investment?

An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice

An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average fixed cost equal to when Q = 10?

If the market for products produced by firms in a monopolistically competitive industry becomes , then there will be firms and each firm will produce output and charge a price.

A monopoly firm will maximize profits by producing where

In the model of monopolistic competition, an increase in industry output will producers of higher-priced goods and producers of lower-priced goods.

A monopoly firm engaged in international trade will

International trade based on external scale economies in both countries is likely to be carried out by

The simultaneous export and import of widgets by the United States is an example of

A firm in long-run equilibrium under monopolistic competition will earn

Trade without serious income distribution effects is most likely to happen

A firm's foreign direct investment. decisions are, in the case of horizontal FDI, strongly influenced by and, in the case of vertical FDI, strongly influenced by .

An imperfectly competitive firm has the following demand curve: Q = 100 - 2P. What is marginal revenue equal to when P = 30?

-Refer to above figure. While selling exports it would also maximize its domestic sales by equating its marginal (opportunity) cost to its marginal revenue of $5. How much steel would the firm sell domestically, and at what price?

Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in

In the model of monopolistic competition, if firms have average cost curves, then opening trade will cause firms to the industry.

In the model of monopolistic competition, trade costs between countries cause

In the model of monopolistic competition, trade costs between countries cause

Firms that produce products must be competitive.