Question 1

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

Accepted Answer

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

Question 2

In an industry where firms experience internal scale economies,the long-run cost of production will depend on

Accepted Answer

A)  the size of the market.
B)  the size of the labor force.
C)  whether the country engages in intra-industry trade.
D)  individual firms' fixed costs.
E)  whether the country engages in inter-industry trade. A

Question 3

In the model of monopolistic competition,an increase in industry output will cause individual firms' demand curves to become ________,which will ________ demand for higher-priced goods and ________ demand for lower-priced goods.

Accepted Answer

A)  flatter;reduce;increase
B)  steeper;reduce;increase
C)  flatter;increase;reduce
D)  steeper;increase;reduce
E)  horizontal;reduce;reduce A

Question 4

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

Accepted Answer

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

Question 5

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 6

-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 it...

Question 7

In the model of monopolistic competition,if firms have ________ average cost curves,then opening trade will ________ the total number of firms and ________ the average price.

Accepted Answer

A)  downward sloping;decrease;decrease
B)  downward sloping;decrease;increase
C)  downward sloping;increase;decrease
D)  upward sloping;decrease;increase
E)  upward sloping;increase;decrease

Question 8

An industry is characterized by scale economies,and exists in two countries.Should these two countries engage in trade such that the combined market is supplied by one country's industry,then

Accepted Answer

A)  consumers in both countries would have more varieties and lower prices.
B)  consumers in both countries would have higher prices and fewer varieties.
C)  consumers in the importing country only would have higher prices and fewer varieties.
D)  consumers in the exporting country only would have higher prices and fewer varieties.
E)  consumers in both countries would have fewer varieties at lower prices.

Question 9

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

Accepted Answer

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

Question 10

Consider the following two cases.In the first,a U.S.firm purchases 18% of a foreign firm.In the second,a U.S.firm builds a new production facility in a foreign country.Both are ________,with the first referred to as ________ and the second as ________.

Accepted Answer

A)  foreign direct investment (FDI) outflows;greenfield;brownfield
B)  foreign direct investment (FDI) inflows;greenfield;brownfield
C)  foreign direct investment (FDI) outflows;brownfield;greenfield
D)  foreign direct investment (FDI) inflows;brownfield;greenfield
E)  foreign direct investment (FDI) ;inflows;outflows

Question 11

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)  smaller;fewer;less;higher
B)  smaller;more;less;higher
C)  smaller;more;less;lower
D)  smaller;fewer;less;lower
E)  smaller;fewer;more;higher

Question 12

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 13

It is possible that trade based on external scale economies may leave a country worse off than it would have been without trade.Explain how this could happen.

Accepted Answer

The answer of It is possible that trade based on...

Question 14

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

Question 15

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

Question 16

The most common form of price discrimination in international trade is

Accepted Answer

A)  dumping.
B)  non-tariff barriers.
C)  Voluntary Export Restraints.
D)  preferential trade arrangements.
E)  product boycotts.

Question 17

A monopoly firm will maximize profits by producing where

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

In the model of monopolistic competition,trade costs between countries will cause domestic and foreign markets to have ________ prices,________ quantities sold,and ________ profit levels.

Accepted Answer

A)  different;different;different
B)  identical;different;different
C)  different;different;identical
D)  identical;different;identical
E)  identical;identical;different

Question 20

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...

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

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

In an industry where firms experience internal scale economies,the long-run cost of production will depend on

In the model of monopolistic competition,an increase in industry output will cause individual firms' demand curves to become ,which will demand for higher-priced goods and demand for lower-priced goods.

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

In the model of monopolistic competition,if firms have average cost curves,then opening trade will the total number of firms and the average price.

An industry is characterized by scale economies,and exists in two countries.Should these two countries engage in trade such that the combined market is supplied by one country's industry,then

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

Consider the following two cases.In the first,a U.S.firm purchases 18% of a foreign firm.In the second,a U.S.firm builds a new production facility in a foreign country.Both are ,with the first referred to as and the second as .

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.

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

It is possible that trade based on external scale economies may leave a country worse off than it would have been without trade.Explain how this could 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 .

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.

The most common form of price discrimination in international trade is

A monopoly firm will maximize profits by producing where

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

In the model of monopolistic competition,trade costs between countries will cause domestic and foreign markets to have prices, quantities sold,and profit levels.

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