Question 1

Intra-industry trade is most common in the trade patterns of

Accepted Answer

Intra-industry trade refers to the exchange of goods within the same industry between countries. This is most common in industrialized countries with highly developed and diversified economies, such as those in Western Europe. These countries have a large number of industries producing similar or complementary products, leading to a high degree of intra-industry trade. Developing countries, raw material producers, and those specializing in labor-intensive products are more likely to engage in inter-industry trade, where they trade goods that are different from what they produce. China is an exception, as it has developed a highly diversified manufacturing sector and is involved in both intra- and inter-industry trade.

Question 2

A monopoly firm will maximize profits by producing where

Accepted Answer

A monopoly firm will maximize profits by producing where marginal revenue equals marginal cost. If the firm sells in both domestic and foreign markets, it will equate marginal revenue across these markets to maximize overall profit.

Question 3

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

When trade occurs between two countries with an industry characterized by scale economies, it allows for specialization which leads to lower costs and increased efficiency. As a result, consumers in both countries would have access to more varieties and lower prices due to the comparative advantage gained through trade.

Question 4

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

In a monopolistically competitive market, as the market becomes larger, more firms can enter due to the potential for profits. Each firm will produce more output due to increased demand and competition, leading to a lower price.

Question 5

Imagine scale economies were not only external to firms,but were also external to individual countries.That is,the larger the worldwide industry (regardless of where firms or plants are located),the cheaper would be the per-unit cost of production.Describe what world trade would look like in this case.

Accepted Answer

The answer of Imagine scale economies were not only external...

Question 6

A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

Accepted Answer

In monopolistically competitive industries, firms can differentiate their products through branding and marketing efforts, leading to a variety of products being available. If two countries engage in trade with each other, it is likely that each country will export different varieties of the product to the other. This is because each country may have firms that excel in producing different versions of the product through their unique branding and marketing efforts.

Question 7

Trade without serious income distribution effects is most likely to happen

Accepted Answer

Sophisticated manufactures trade between rich countries is less likely to have serious income distribution effects because both countries have similar levels of development and income distribution. Additionally, these industries generally require high skill levels and advanced technology, which means that the workers are likely to earn higher wages compared to those in other industries.

Question 8

Intra-industry trade will tend to dominate trade flows when which of the following exists?

Accepted Answer

Intra-industry trade refers to the trade of similar goods between countries within the same industry. When there are small or no differences in relative factor availabilities, countries can produce similar products using similar inputs, making it easier for them to trade within the same industry. This would lead to intra-industry trade dominating trade flows.

Question 9

We often observe "pseudo-intra-industry trade" between the United States and Mexico.Actually,such trade is consistent with

Accepted Answer

Pseudo-intra-industry trade between the United States and Mexico is consistent with the comparative advantage associated with the Heckscher-Ohlin model, which explains trade patterns based on countries' factor endowments.

Question 10

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

Accepted Answer

The answer of International trade based on external scale economies...

Question 11

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

Accepted Answer

When two countries engage in trade in products with scale economies, produced under conditions of monopolistic competition, they are likely to engage in intra-industry trade. Intra-industry trade occurs when countries trade goods of the same industry or products that are similar in nature. This type of trade is mainly driven by differences in product quality, design, and marketing. It allows countries to specialize in the production of particular goods and benefit from scale economies, leading to increased efficiency and productivity.

Question 12

Under the model of monopolistic competition,a(an)________ in the number of firms in the industry will cause ________ to ________.

Accepted Answer

An increase in the number of firms in a monopolistically competitive market reduces the market power of individual firms, leading to a decrease in the markup over marginal cost.

Question 13

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

Accepted Answer

In the absence of scale economies and under perfect competition, countries are likely to engage in inter-industry trade, where they trade different types of goods based on comparative advantage.

Question 14

-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 15

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

Accepted Answer

In the long run, monopolistic competition is characterized by free entry and exit, which means that if firms in the industry were to earn economic profits, new firms would enter the market, increasing competition and driving down prices. As a result, in the long run, firms in monopolistic competition earn zero economic profits due to the existence of substitutes and free entry.

Question 16

-Refer to above figure.The monopolist can export as much as it likes of its steel at the world price of $5/ton.How much steel will the monopolist sell,and at what price?

Accepted Answer

The answer of 
-Refer to above figure.The monopolist can export...

Question 17

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

International trade allows for specialization and allows each country to take advantage of their respective scale economies. As a result, prices can be lowered and consumers can enjoy a greater variety of products.

Question 18

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

Accepted Answer

The answer of International trade based solely on internal scale...

Question 19

-Refer to above figure.Given the opportunity to sell at world prices,the marginal (opportunity)cost of selling a ton domestically is what?

Accepted Answer

The answer of 
-Refer to above figure.Given the opportunity to...

Question 20

A monopoly firm engaged in international trade will

Accepted Answer

A monopoly firm will equate marginal costs with marginal revenues in both domestic and foreign markets to maximize profits.

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

Intra-industry trade is most common in the trade patterns of

A monopoly firm will maximize profits by producing where

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

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 product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

Trade without serious income distribution effects is most likely to happen

Intra-industry trade will tend to dominate trade flows when which of the following exists?

We often observe "pseudo-intra-industry trade" between the United States and Mexico.Actually,such trade is consistent with

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

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

Under the model of monopolistic competition,a(an) in the number of firms in the industry will cause to .

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

-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?

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

-Refer to above figure.The monopolist can export as much as it likes of its steel at the world price of $5/ton.How much steel will the monopolist sell,and at what price?

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

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

-Refer to above figure.Given the opportunity to sell at world prices,the marginal (opportunity)cost of selling a ton domestically is what?

A monopoly firm engaged in international trade will

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

Intra-industry trade is most common in the trade patterns of

A monopoly firm will maximize profits by producing where

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

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 product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

Trade without serious income distribution effects is most likely to happen

Intra-industry trade will tend to dominate trade flows when which of the following exists?

We often observe "pseudo-intra-industry trade" between the United States and Mexico.Actually,such trade is consistent with

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

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

Under the model of monopolistic competition,a(an) ________ in the number of firms in the industry will cause ________ to ________.

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

-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?

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

-Refer to above figure.The monopolist can export as much as it likes of its steel at the world price of $5/ton.How much steel will the monopolist sell,and at what price?

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

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

-Refer to above figure.Given the opportunity to sell at world prices,the marginal (opportunity)cost of selling a ton domestically is what?

A monopoly firm engaged in international trade will

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.

Under the model of monopolistic competition,a(an) in the number of firms in the industry will cause to .