Question 1

When imports and exports for the same type of good are nearly
Equal:

Accepted Answer

A) the laws of comparative advantage break down. 
B) it is an indication that nearly all the trade is intra­industry. 
C) exports are probably just "finished" in the nation instead of being fully sourced there. 
D) there is a very low level of intra­industry trade. 
A) the laws of comparative advantage break down. 
B) it is an indication that nearly all the trade is intra­industry. 
C) exports are probably just "finished" in the nation instead of being fully sourced there. 
D) there is a very low level of intra­industry trade. B

Question 2

NAFTA probably helped productivity in Mexico's maquiladora
Sector, but:

Accepted Answer

A) trade with China has taken on more importance. 
B) world competition and the close relationship with the United States may have limited its comeback. 
C) both governments have reversed some of the tariff reductions. 
D) Mexico has raised taxes on the maquiladoras, and that has caused international tension. 
A) trade with China has taken on more importance. 
B) world competition and the close relationship with the United States may have limited its comeback. 
C) both governments have reversed some of the tariff reductions. 
D) Mexico has raised taxes on the maquiladoras, and that has caused international tension. B

Question 3

The costs identified with opening trade are called:

Accepted Answer

A) short­run costs. 
B) adjustment costs. 
C) variable costs. 
D) overhead costs. 
A) short­run costs. 
B) adjustment costs. 
C) variable costs. 
D) overhead costs. B

Question 4

The cross­trade of very similar products exported and imported
By trading partners seems to contradict which of the following
Model(s)?

Accepted Answer

A) Ricardian 
B) Heckscher­Ohlin 
C) specific­factors 
D) It contradicts all of these models. 
A) Ricardian 
B) Heckscher­Ohlin 
C) specific­factors 
D) It contradicts all of these models.

Question 5

(Figure: Costs and Demand for a Monopolistic Competitor) The
Profit­maximizing amount of output produced:

Accepted Answer

A) will be 42. 
B) will be 32. 
C) will be 0 (not profitable). 
D) will be 50. 
A) will be 42. 
B) will be 32. 
C) will be 0 (not profitable). 
D) will be 50.

Question 6

What do tests of the gravity equation for trade between
Canadian provinces and American states indicate?

Accepted Answer

A) Individual state and individual provincial GDPs are negatively related to the amount of trade between individual states and
Provinces. 
B) Individual state and individual provincial GDPs are positively related to the amount of trade between individual states and
Provinces. 
C) Individual state and individual provincial GDPs are not at all related to the amount of trade between individual states and
Provinces. 
D) The gravity equation does not apply to U.S.­Canadian trade. 
A) Individual state and individual provincial GDPs are negatively related to the amount of trade between individual states and
Provinces. 
B) Individual state and individual provincial GDPs are positively related to the amount of trade between individual states and
Provinces. 
C) Individual state and individual provincial GDPs are not at all related to the amount of trade between individual states and
Provinces. 
D) The gravity equation does not apply to U.S.­Canadian trade.

Question 7

In the long run, profits in a monopolistic competition market are
Zero because:

Accepted Answer

A) of government regulations. 
B) of collusion. 
C) firms are free to enter and exit the market. 
D) firms produce a differentiated product. 
A) of government regulations. 
B) of collusion. 
C) firms are free to enter and exit the market. 
D) firms produce a differentiated product.

Question 8

Which of the following is NOT an assumption of monopolistic
Competition?

Accepted Answer

A) Each firm's output is slightly different from other firms in the industry. 
B) There are many firms in the industry. 
C) Production occurs with increasing returns to scale technology. 
D) Each firm faces a perfectly elastic demand curve. 
A) Each firm's output is slightly different from other firms in the industry. 
B) There are many firms in the industry. 
C) Production occurs with increasing returns to scale technology. 
D) Each firm faces a perfectly elastic demand curve.

Question 9

In the long run, a monopolistically competitive firm will produce
Where:

Accepted Answer

A) average cost equals price. 
B) average cost equals marginal revenue. 
C) marginal revenue equals price. 
D) marginal cost equals price. 
A) average cost equals price. 
B) average cost equals marginal revenue. 
C) marginal revenue equals price. 
D) marginal cost equals price.

Question 10

Which of the following features is characteristic of monopolistic
Competition?

Accepted Answer

A) many large producers 
B) homogeneous products 
C) differentiated products 
D) No individual producer has any influence on the market price. 
A) many large producers 
B) homogeneous products 
C) differentiated products 
D) No individual producer has any influence on the market price.

Question 11

What did the gravity equation predict about trade within the
Borders of a nation?

Accepted Answer

A) Trade between states or regions within a nation is much more likely than trade outside the borders. 
B) Trade between states or regions within a nation is much less likely to occur. 
C) There was no predictive value for trade within a nation's borders. 
D) Trade between states or regions within a nation is more subject to national law and regulation and therefore not as
Predictable. 
A) Trade between states or regions within a nation is much more likely than trade outside the borders. 
B) Trade between states or regions within a nation is much less likely to occur. 
C) There was no predictive value for trade within a nation's borders. 
D) Trade between states or regions within a nation is more subject to national law and regulation and therefore not as
Predictable.

Question 12

NAFTA includes an agreement that allows trucks from
neighboring countries access to highways on both sides of the
border.Why did it take 17 years for the agreement to be
implemented between the United States and Mexico? And what
actions did Mexico take to facilitate the agreement's
implementation?

Accepted Answer

Political pressure from U.S.trucking fir

Question 13

The fall in real wages for the maquiladora workers during the
1990s was likely due to what?

Accepted Answer

The rising prices of

Question 14

In what two ways does trade benefit consumers when firms are
Monopolistically competitive?

Accepted Answer

A) better quality products, increased information 
B) higher incomes, more dependable products 
C) lots of bells and whistles, higher wages 
D) lower prices, more variety 
A) better quality products, increased information 
B) higher incomes, more dependable products 
C) lots of bells and whistles, higher wages 
D) lower prices, more variety

Question 15

The distances from Paris, France, to Frankfurt, Germany;
Stockholm, Sweden; and Oslo, Norway, are about 400 miles,
450 miles, and 500 miles, respectively.Would you expect
French trade to be greatest with Germany, Sweden, or Norway?

Accepted Answer

A) Germany 
B) Sweden 
C) Norway 
D) Equal volumes of trade would be expected with each country. 
A) Germany 
B) Sweden 
C) Norway 
D) Equal volumes of trade would be expected with each country.

Question 16

Why can't the models developed in previous chapters
(Ricardian, specific factors, and Heckscher­Ohlin) be used to
explain trade in intra­industry products?

Accepted Answer

Intra­industry trade is not po

Question 17

Would you say that the gains from NAFTA clearly outweigh its
costs for the United States?

Accepted Answer

No; the initial gains from add

Question 18

In the long run, a monopolistically competitive firm:

Accepted Answer

A) will earn normal profits. 
B) will earn excess profits. 
C) will earn no profits. 
D) will produce where marginal cost equals price. 
A) will earn normal profits. 
B) will earn excess profits. 
C) will earn no profits. 
D) will produce where marginal cost equals price.

Question 19

Approximately how many U.S.workers received Trade
Adjustment Assistance from 1994 to 2002 as a result of job
Losses due to NAFTA?

Accepted Answer

A) 525 million 
B) 52.5 million 
C) 5.25 million 
D) 0.525 million 
A) 525 million 
B) 52.5 million 
C) 5.25 million 
D) 0.525 million

Question 20

A firm's average costs will be falling whenever its:

Accepted Answer

A) marginal costs are positive. 
B) marginal costs are negative. 
C) marginal costs are less than average costs. 
D) marginal costs are less than fixed costs. 
A) marginal costs are positive. 
B) marginal costs are negative. 
C) marginal costs are less than average costs. 
D) marginal costs are less than fixed costs.

When imports and exports for the same type of good are nearly Equal:

NAFTA probably helped productivity in Mexico's maquiladora Sector, but:

The costs identified with opening trade are called:

The crosstrade of very similar products exported and imported By trading partners seems to contradict which of the following Model(s)?

(Figure: Costs and Demand for a Monopolistic Competitor) The Profitmaximizing amount of output produced:

What do tests of the gravity equation for trade between Canadian provinces and American states indicate?

In the long run, profits in a monopolistic competition market are Zero because:

Which of the following is NOT an assumption of monopolistic Competition?

In the long run, a monopolistically competitive firm will produce Where:

Which of the following features is characteristic of monopolistic Competition?

What did the gravity equation predict about trade within the Borders of a nation?

NAFTA includes an agreement that allows trucks from neighboring countries access to highways on both sides of the border.Why did it take 17 years for the agreement to be implemented between the United States and Mexico? And what actions did Mexico take to facilitate the agreement's implementation?

The fall in real wages for the maquiladora workers during the 1990s was likely due to what?

In what two ways does trade benefit consumers when firms are Monopolistically competitive?

The distances from Paris, France, to Frankfurt, Germany; Stockholm, Sweden; and Oslo, Norway, are about 400 miles, 450 miles, and 500 miles, respectively.Would you expect French trade to be greatest with Germany, Sweden, or Norway?

Why can't the models developed in previous chapters (Ricardian, specific factors, and HeckscherOhlin) be used to explain trade in intraindustry products?

Would you say that the gains from NAFTA clearly outweigh its costs for the United States?

In the long run, a monopolistically competitive firm:

Approximately how many U.S.workers received Trade Adjustment Assistance from 1994 to 2002 as a result of job Losses due to NAFTA?

A firm's average costs will be falling whenever its:

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

Exam 6: Increasing Returns to Scale and Monopolistic Competition

When imports and exports for the same type of good are nearly Equal:

NAFTA probably helped productivity in Mexico's maquiladora Sector, but:

The costs identified with opening trade are called:

The cross­trade of very similar products exported and imported By trading partners seems to contradict which of the following Model(s)?

(Figure: Costs and Demand for a Monopolistic Competitor) The Profit­maximizing amount of output produced:

What do tests of the gravity equation for trade between Canadian provinces and American states indicate?

In the long run, profits in a monopolistic competition market are Zero because:

Which of the following is NOT an assumption of monopolistic Competition?

In the long run, a monopolistically competitive firm will produce Where:

Which of the following features is characteristic of monopolistic Competition?

What did the gravity equation predict about trade within the Borders of a nation?

NAFTA includes an agreement that allows trucks from neighboring countries access to highways on both sides of the border.Why did it take 17 years for the agreement to be implemented between the United States and Mexico? And what actions did Mexico take to facilitate the agreement's implementation?

The fall in real wages for the maquiladora workers during the 1990s was likely due to what?

In what two ways does trade benefit consumers when firms are Monopolistically competitive?

The distances from Paris, France, to Frankfurt, Germany; Stockholm, Sweden; and Oslo, Norway, are about 400 miles, 450 miles, and 500 miles, respectively.Would you expect French trade to be greatest with Germany, Sweden, or Norway?

Why can't the models developed in previous chapters (Ricardian, specific factors, and Heckscher­Ohlin) be used to explain trade in intra­industry products?

Would you say that the gains from NAFTA clearly outweigh its costs for the United States?

In the long run, a monopolistically competitive firm:

Approximately how many U.S.workers received Trade Adjustment Assistance from 1994 to 2002 as a result of job Losses due to NAFTA?

A firm's average costs will be falling whenever its:

The Global Economy

Trade and Technology: the Ricardian Model

Gains and Losses From Trade in the Specific-Factors Model

Trade and Resources: the Heckscher-Ohlin Model

Movement of Labor and Capital Between Countries

Import Tariffs and Quotas Under Perfect Competition

Import Tariffs and Quotas Under Imperfect Competition

International Agreements: Trade, Labor, and the Environment

Introduction to Exchange Rates and the Foreign Exchange Market

Exchange Rates I: the Monetary Approach in the Long Run

Filters

The crosstrade of very similar products exported and imported By trading partners seems to contradict which of the following Model(s)?

(Figure: Costs and Demand for a Monopolistic Competitor) The Profitmaximizing amount of output produced:

Why can't the models developed in previous chapters (Ricardian, specific factors, and HeckscherOhlin) be used to explain trade in intraindustry products?