Question 1

The most common form of price discrimination in international trade is

Accepted Answer

The answer of The most common form of price discrimination...

Question 2

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

If the market for products produced by firms in a monopolistically competitive industry becomes smaller, meaning demand decreases, firms will experience a decrease in profits. As a result, some firms may exit the market, leading to fewer firms. Each remaining firm will produce less output to match the decrease in demand and charge a higher price to maintain profits.

Question 3

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

Accepted Answer

In monopolistic competition, firms have a degree of market power and can charge prices above their marginal costs to differentiate their products. When trade costs are introduced between countries, it becomes more costly to export goods and the marginal costs of exported goods increase, making it more expensive for firms to sell their products abroad. This leads to the marginal costs of exported goods exceeding the marginal costs of goods sold domestically.

Question 4

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

Accepted Answer

In the model of monopolistic competition, trade costs between countries often cause some firms that can earn a profit on domestic sales to refrain from exporting their goods. This is because the additional costs associated with exporting (such as shipping, tariffs, etc.) make it less profitable for firms to sell their goods in foreign markets. As a result, even though there may be demand for their products in other countries, these firms may choose to focus exclusively on the domestic market where they can earn a higher profit at a lower cost.

Question 5

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

Accepted Answer

In a model of monopolistic competition with different average cost curves, opening trade allows more efficient firms to compete more effectively on a global scale, leading to less efficient firms being unable to compete and thus exiting the industry.

Question 6

A corporation is considered a multinational ________ if ________.

Accepted Answer

A corporation is considered a multinational affiliate if more than 10% of its stock is held by a foreign company.

Question 7

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

In a model of monopolistic competition, trade costs (such as tariffs, shipping costs, etc.) make it more expensive to sell products in foreign markets, leading to different prices due to the need to cover these additional costs. These trade costs also affect the quantities sold, as higher prices in foreign markets can reduce demand. Finally, profit levels will differ because firms face different costs and demand conditions in each market, affecting their profitability.

Question 8

In the model of monopolistic competition,compared to a firm with a lower marginal cost,a firm with a higher marginal cost will set a ________ price,produce ________ output,and earn ________ profits.

Accepted Answer

In a model of monopolistic competition, a firm with a higher marginal cost will set a higher price to cover the increased costs, produce less output due to the higher cost of production per unit, and earn less profit because of the higher costs and potentially reduced demand due to the higher price.

Question 9

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

Accepted Answer

The long-run cost of production in an industry with internal scale economies depends on the size of the market. As the market size grows, firms can increase their production, which in turn lowers their per-unit costs, leading to lower long-run costs. This is due to firms being able to spread out their fixed costs over a larger number of units produced, taking advantage of economies of scale. Therefore, option D is the correct answer. The other options are not relevant to the long-run cost of production in an industry with internal scale economies.

Question 10

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

In a model of monopolistic competition, an increase in industry output typically leads to more competition and potentially lower prices overall. Producers of higher-priced goods may be harmed because their products become less attractive compared to the now more abundant, lower-priced alternatives. Conversely, producers of lower-priced goods might benefit as the increased output aligns with their competitive advantage in pricing, potentially increasing their market share.

Question 11

-The figure above represents the demand and cost functions facing a Brazilian steel producing monopolist.The Brazilian firm is charging its foreign (U.S. )customers one half the price it is charging its domestic customers.Is this good or bad for the real income or economic welfare of the United States? Is the Brazilian firm engaged in dumping? Is this predatory behavior on the part of the Brazilian steel company?

Accepted Answer

The answer of 
-The figure above represents the demand and...

Question 12

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

In monopolistic competition, each firm faces a downward sloping demand curve since their products are differentiated. Therefore, an increase in industry output will lead to an increase in the availability of substitutes, causing a decrease in individual firms' demand curves, making them flatter. A flatter demand curve implies a greater elasticity of demand, leading to a decrease in demand for higher-priced goods and an increase in demand for lower-priced goods.

Question 13

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

The answer of In the model of monopolistic competition,if firms...

Question 14

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

Accepted Answer

The answer of In the model of monopolistic competition,an increase...

Question 15

A corporation is considered a multinational ________ if ________.

Accepted Answer

A corporation is considered a multinational parent if it owns more than 10% of a foreign firm. This is because a parent company is the one that owns a controlling interest in another company, which is the foreign firm in this case.

Question 16

In the model of monopolistic competition,compared to a firm with a higher marginal cost,a firm with a lower marginal cost will set a ________ price,produce ________ output,and earn ________ profits.

Accepted Answer

In monopolistic competition, firms have some degree of market power due to product differentiation. A firm with a lower marginal cost can afford to set a lower price and produce more output than a firm with a higher marginal cost, while still earning profits. Therefore, the correct choice is C: lower price, more output, and more profits. The other choices have at least one incorrect statement.

Question 17

Complaints are often made to the International Trade Commission concerning foreign "dumping" practices.These complaints typically claim that

Accepted Answer

Complaints about foreign "dumping" practices usually claim that U.S. firms are being harmed by the unfair pricing of foreign exporters. Dumping is the practice of selling goods in the U.S. market at prices below cost, or below prices charged in the exporter's home market, in order to gain a competitive advantage. This can harm U.S. firms that cannot compete with the artificially low prices of the dumped goods. The International Trade Commission is responsible for investigating such complaints and determining whether the dumping has caused or is likely to cause material injury to a U.S. industry.

Question 18

-The figure above represents the demand and cost functions facing a Brazilian steel producing monopolist.If it were unable to export,and was constrained by its domestic market,what quantity would it sell at what price?

Accepted Answer

The answer of 
-The figure above represents the demand and...

Question 19

If an industry is imperfectly competitive,and markets are segmented then

Accepted Answer

In an imperfectly competitive industry, firms may have market power and can engage in anti-competitive behavior such as dumping, which involves selling goods at a lower price in a foreign market than in the domestic market. If markets are segmented, then there may be different prices in different markets, and a firm may find it profitable to engage in dumping. Therefore, option C is the best choice. The other options are not necessarily related to imperfect competition and market segmentation.

Question 20

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

The answer of Consider the following two cases.In the first,a...

Quiz 8: Firms in the Global Economy: Export Decisions, outsourcing, and Multinational Enterprises

The most common form of price discrimination in international trade is

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.

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

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

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

A corporation is considered a multinational if .

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

In the model of monopolistic competition,compared to a firm with a lower marginal cost,a firm with a higher marginal cost will set a price,produce output,and earn profits.

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 producers of higher-priced goods and producers of lower-priced goods.

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.

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.

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

A corporation is considered a multinational if .

In the model of monopolistic competition,compared to a firm with a higher marginal cost,a firm with a lower marginal cost will set a price,produce output,and earn profits.

Complaints are often made to the International Trade Commission concerning foreign "dumping" practices.These complaints typically claim that

-The figure above represents the demand and cost functions facing a Brazilian steel producing monopolist.If it were unable to export,and was constrained by its domestic market,what quantity would it sell at what price?

If an industry is imperfectly competitive,and markets are segmented then

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 .