Question 1

Has the United States gained or lost from NAFTA?

Accepted Answer

Estimates in the text are that

Question 2

What is the value of the intra­industry trade index for an
Industry in which exports are $200 million and imports are $20
Million?

Accepted Answer

A) 2.00 
B) (200 + 20)/20 = 11.00 
C) 20/[1/2 × (200 + 20)] = 0.18 
D) (200 - 20)/200 = 0.90 
A) 2.00 
B) (200 + 20)/20 = 11.00 
C) 20/[1/2 × (200 + 20)] = 0.18 
D) (200 - 20)/200 = 0.90

Question 3

The gravity equation uses a calculation to predict the level of
Bilateral trade based directly on ____ and inversely on _____.

Accepted Answer

A) wages; technology 
B) size of the countries' GDP; the geographic distance between the countries 
C) the percent of the countries' GDP in manufacturing; their level of tariffs 
D) the growth rates of the countries' GDP; their openness to trade 
A) wages; technology 
B) size of the countries' GDP; the geographic distance between the countries 
C) the percent of the countries' GDP in manufacturing; their level of tariffs 
D) the growth rates of the countries' GDP; their openness to trade

Question 4

NAFTA is believed to have __________ manufacturing
Productivity, especially in the maquiladora plants.

Accepted Answer

A) raised 
B) lowered 
C) had no effect on 
D) greatly hindered 
A) raised 
B) lowered 
C) had no effect on 
D) greatly hindered

Question 5

Increasing returns to scale occurs when a firm's:

Accepted Answer

A) average costs of production increase as its output increases. 
B) average costs of production decrease as its output increases. 
C) average fixed costs increase as its output increases. 
D) marginal costs increase as its output increases. 
A) average costs of production increase as its output increases. 
B) average costs of production decrease as its output increases. 
C) average fixed costs increase as its output increases. 
D) marginal costs increase as its output increases.

Question 6

A monopolistic competitive firm:

Accepted Answer

A) will always earn monopoly profits. 
B) will never earn monopoly profits. 
C) may earn monopoly profits in the short run. 
D) may earn monopoly profits in the long run. 
A) will always earn monopoly profits. 
B) will never earn monopoly profits. 
C) may earn monopoly profits in the short run. 
D) may earn monopoly profits in the long run.

Question 7

When trade occurs among nations with similar tastes,
Technology, products, and costs, monopolistically competitive
Firms will have an incentive:

Accepted Answer

A) to lower prices to get new customers and increase market share. 
B) to raise prices to take advantage of a lucrative situation. 
C) to cut corners in manufacturing to boost profits. 
D) to raise quality, so they can charge a higher price than the competition. 
A) to lower prices to get new customers and increase market share. 
B) to raise prices to take advantage of a lucrative situation. 
C) to cut corners in manufacturing to boost profits. 
D) to raise quality, so they can charge a higher price than the competition.

Question 8

Which of the following will NOT cause increasing returns to scale
And declining average costs?

Accepted Answer

A) focusing on a single product line and specializing 
B) exporting goods to other countries 
C) selling more in their home market 
D) hiring more workers at the existing plant 
A) focusing on a single product line and specializing 
B) exporting goods to other countries 
C) selling more in their home market 
D) hiring more workers at the existing plant

Question 9

Mexico's gains from NAFTA have benefited mostly:

Accepted Answer

A) unskilled workers. 
B) semi­skilled workers. 
C) higher­income workers. 
D) agricultural workers. 
A) unskilled workers. 
B) semi­skilled workers. 
C) higher­income workers. 
D) agricultural workers.

Question 10

For a monopolistic competitor, marginal revenue at its short­run
Equilibrium price and quantity equals:

Accepted Answer

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

Question 11

(Figure: Costs and Demand for a Monopolistic Competitor) The
Total cost of producing the profit­maximizing output is:

Accepted Answer

A) $320. 
B) $480. 
C) $420. 
D) $500. 
A) $320. 
B) $480. 
C) $420. 
D) $500.

Question 12

To analyze monopolistic competition in trade, we make several
Assumptions about the market.Which of the following is NOT an
Assumption of monopolistic competition?

Accepted Answer

A) many firms in the industry 
B) easy entry and exit 
C) constant long­run average cost 
D) increasing returns to scale, falling long­run average cost 
A) many firms in the industry 
B) easy entry and exit 
C) constant long­run average cost 
D) increasing returns to scale, falling long­run average cost

Question 13

Since NAFTA was signed, Mexico saw the productivity of its
Firms:

Accepted Answer

A) decrease in the nonmaquiladora plants. 
B) decrease in the maquiladora plants. 
C) increase in the maquiladora plants at a faster pace than in the nonmaquiladora plants. 
D) increase in the maquiladora plants at a slower pace than in the nonmaquiladora plants. 
A) decrease in the nonmaquiladora plants. 
B) decrease in the maquiladora plants. 
C) increase in the maquiladora plants at a faster pace than in the nonmaquiladora plants. 
D) increase in the maquiladora plants at a slower pace than in the nonmaquiladora plants.

Question 14

Demand Equation for a Good Produced by a
Monopolistically Competitive Firm:
P = 10 - Q
Reference: Ref 6­3
(Demand Equation) If the firm has no fixed costs and variable
Costs of $2 per unit, what is the value of the firm's monopoly
Profits when it sets a price that maximizes its monopoly profits?

Accepted Answer

A) $7 
B) $12 
C) $15 
D) $16 
A) $7 
B) $12 
C) $15 
D) $16

Question 15

In the short run, in equilibrium, firms that operate in a
Monopolistically competitive market face a down sloping demand
Curve and will charge a price where _____ and ______.

Accepted Answer

A) quantity produced is maximized; costs are minimized 
B) sales revenue is maximized; costs are falling 
C) MR = MC; P > average cost 
D) average costs are rising; sales are rising 
A) quantity produced is maximized; costs are minimized 
B) sales revenue is maximized; costs are falling 
C) MR = MC; P > average cost 
D) average costs are rising; sales are rising

Question 16

For which of the following products would you expect the index
Of intra­industry trade to be lowest?

Accepted Answer

A) golf clubs 
B) automobiles 
C) whiskey 
D) natural gas 
A) golf clubs 
B) automobiles 
C) whiskey 
D) natural gas

Question 17

When research and development costs are spread out over
more consumers, it is an example of what?

Accepted Answer

The answer of When research and development costs are spread...

Question 18

(Table: Imports and Exports of Commodities Within U.S.
Industries) Which of the following is the intra­industry trade
Index for large passenger aircraft?

Accepted Answer

A) 129.10% 
B) 54% 
C) 2.56% 
D) 42% 
A) 129.10% 
B) 54% 
C) 2.56% 
D) 42%

Question 19

In a duopoly, each firm faces:

Accepted Answer

A) a more elastic demand curve if it raises its price. 
B) a more elastic demand curve if it lowers its price. 
C) a perfectly elastic demand curve. 
D) a perfectly inelastic demand curved. 
A) a more elastic demand curve if it raises its price. 
B) a more elastic demand curve if it lowers its price. 
C) a perfectly elastic demand curve. 
D) a perfectly inelastic demand curved.

Question 20

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

Accepted Answer

A) Firms produce goods, using a technology with increasing returns to scale. 
B) There are many firms in the industry. 
C) Firms have some control over the price of the product. 
D) Each firm produces a good that is similar to, but differentiated from, the goods that other firms in the industry
Produce. 
A) Firms produce goods, using a technology with increasing returns to scale. 
B) There are many firms in the industry. 
C) Firms have some control over the price of the product. 
D) Each firm produces a good that is similar to, but differentiated from, the goods that other firms in the industry
Produce.

Has the United States gained or lost from NAFTA?

What is the value of the intraindustry trade index for an Industry in which exports are $200 million and imports are $20 Million?

The gravity equation uses a calculation to predict the level of Bilateral trade based directly on and inversely on _.

NAFTA is believed to have __________ manufacturing Productivity, especially in the maquiladora plants.

Increasing returns to scale occurs when a firm's:

A monopolistic competitive firm:

When trade occurs among nations with similar tastes, Technology, products, and costs, monopolistically competitive Firms will have an incentive:

Which of the following will NOT cause increasing returns to scale And declining average costs?

Mexico's gains from NAFTA have benefited mostly:

For a monopolistic competitor, marginal revenue at its shortrun Equilibrium price and quantity equals:

(Figure: Costs and Demand for a Monopolistic Competitor) The Total cost of producing the profitmaximizing output is:

To analyze monopolistic competition in trade, we make several Assumptions about the market.Which of the following is NOT an Assumption of monopolistic competition?

Since NAFTA was signed, Mexico saw the productivity of its Firms:

Demand Equation for a Good Produced by a Monopolistically Competitive Firm: P = 10 - Q Reference: Ref 63 (Demand Equation) If the firm has no fixed costs and variable Costs of $2 per unit, what is the value of the firm's monopoly Profits when it sets a price that maximizes its monopoly profits?

In the short run, in equilibrium, firms that operate in a Monopolistically competitive market face a down sloping demand Curve and will charge a price where _ and __.

For which of the following products would you expect the index Of intraindustry trade to be lowest?

When research and development costs are spread out over more consumers, it is an example of what?

(Table: Imports and Exports of Commodities Within U.S. Industries) Which of the following is the intraindustry trade Index for large passenger aircraft?

In a duopoly, each firm faces:

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

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

Has the United States gained or lost from NAFTA?

What is the value of the intra­industry trade index for an Industry in which exports are $200 million and imports are $20 Million?

The gravity equation uses a calculation to predict the level of Bilateral trade based directly on ____ and inversely on _____.

NAFTA is believed to have __________ manufacturing Productivity, especially in the maquiladora plants.

Increasing returns to scale occurs when a firm's:

A monopolistic competitive firm:

When trade occurs among nations with similar tastes, Technology, products, and costs, monopolistically competitive Firms will have an incentive:

Which of the following will NOT cause increasing returns to scale And declining average costs?

Mexico's gains from NAFTA have benefited mostly:

For a monopolistic competitor, marginal revenue at its short­run Equilibrium price and quantity equals:

(Figure: Costs and Demand for a Monopolistic Competitor) The Total cost of producing the profit­maximizing output is:

To analyze monopolistic competition in trade, we make several Assumptions about the market.Which of the following is NOT an Assumption of monopolistic competition?

Since NAFTA was signed, Mexico saw the productivity of its Firms:

Demand Equation for a Good Produced by a Monopolistically Competitive Firm: P = 10 - Q Reference: Ref 6­3 (Demand Equation) If the firm has no fixed costs and variable Costs of $2 per unit, what is the value of the firm's monopoly Profits when it sets a price that maximizes its monopoly profits?

In the short run, in equilibrium, firms that operate in a Monopolistically competitive market face a down sloping demand Curve and will charge a price where _____ and ______.

For which of the following products would you expect the index Of intra­industry trade to be lowest?

When research and development costs are spread out over more consumers, it is an example of what?

(Table: Imports and Exports of Commodities Within U.S. Industries) Which of the following is the intra­industry trade Index for large passenger aircraft?

In a duopoly, each firm faces:

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

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

What is the value of the intraindustry trade index for an Industry in which exports are $200 million and imports are $20 Million?

The gravity equation uses a calculation to predict the level of Bilateral trade based directly on and inversely on _.

For a monopolistic competitor, marginal revenue at its shortrun Equilibrium price and quantity equals:

(Figure: Costs and Demand for a Monopolistic Competitor) The Total cost of producing the profitmaximizing output is:

Demand Equation for a Good Produced by a Monopolistically Competitive Firm: P = 10 - Q Reference: Ref 63 (Demand Equation) If the firm has no fixed costs and variable Costs of $2 per unit, what is the value of the firm's monopoly Profits when it sets a price that maximizes its monopoly profits?

In the short run, in equilibrium, firms that operate in a Monopolistically competitive market face a down sloping demand Curve and will charge a price where _ and __.

For which of the following products would you expect the index Of intraindustry trade to be lowest?

(Table: Imports and Exports of Commodities Within U.S. Industries) Which of the following is the intraindustry trade Index for large passenger aircraft?