Question 1

Which of the following is the gravity equation calculation?

Accepted Answer

A) the inverse of the average GDPs times transportation costs 
B) the sum of GDPs times total exports 
C) the product of the GDPs in two nations divided by a measure of the distance between them times a constant, reflecting other
Factors affecting trade 
D) the product of the land mass of the two nations divided by the average of their GDPs times a constant factor, reflecting
Other factors affecting trade 
A) the inverse of the average GDPs times transportation costs 
B) the sum of GDPs times total exports 
C) the product of the GDPs in two nations divided by a measure of the distance between them times a constant, reflecting other
Factors affecting trade 
D) the product of the land mass of the two nations divided by the average of their GDPs times a constant factor, reflecting
Other factors affecting trade

Question 2

The ____________ model best explains intra­industry trade.

Accepted Answer

A) Ricardian 
B) Heckscher­Ohlin 
C) monopolistic competition 
D) specific­factors 
A) Ricardian 
B) Heckscher­Ohlin 
C) monopolistic competition 
D) specific­factors

Question 3

U.S.Trade Adjustment Assistance:

Accepted Answer

A) is not available to workers in manufacturing. 
B) is not available to workers displaced by NAFTA. 
C) is not available to workers in service industries. 
D) expired with the advent of the WTO in 1995. 
A) is not available to workers in manufacturing. 
B) is not available to workers displaced by NAFTA. 
C) is not available to workers in service industries. 
D) expired with the advent of the WTO in 1995.

Question 4

Other things equal, the gravity equation predicts that the United
States will have more trade with __________ than with
_________.

Accepted Answer

A) Bangladesh; Japan 
B) Russia; Japan 
C) Canada; Bangladesh 
D) Russia; Bangladesh 
A) Bangladesh; Japan 
B) Russia; Japan 
C) Canada; Bangladesh 
D) Russia; Bangladesh

Question 5

Why would you expect firms with high research and
development costs to be more interested in free trade?

Accepted Answer

Research and development costs

Question 6

(Table: Distances and GDP) According to the gravity equation,
Which country should be the United States's smallest trade
Partner?

Accepted Answer

A) Germany 
B) Norway 
C) France 
D) Sweden 
A) Germany 
B) Norway 
C) France 
D) Sweden

Question 7

In the long run, the equilibrium number of monopolistically
Competitive firms with trade:

Accepted Answer

A) is less than the total number of firms worldwide in autarky. 
B) is the same as the total number of firms worldwide in autarky. 
C) is greater than the total number of firms worldwide in autarky. 
D) may be less than, the same as, or greater than the total number of firms worldwide in autarky. 
A) is less than the total number of firms worldwide in autarky. 
B) is the same as the total number of firms worldwide in autarky. 
C) is greater than the total number of firms worldwide in autarky. 
D) may be less than, the same as, or greater than the total number of firms worldwide in autarky.

Question 8

If exports of an industry are $100 million and imports are zero,
Which of the following is the value of the index of intra­industry
Trade?

Accepted Answer

A) 0 
B) 1 
C) 0.5 
D) 100 million 
A) 0 
B) 1 
C) 0.5 
D) 100 million

Question 9

Which of the following is (are) factors affecting the constant in
Gravity equation estimates?
I.tariffs and quotas
II.customs' issues and finance and currency issues
III.administrative barriers to trade

Accepted Answer

A) I 
B) II 
C) III 
D) I, II, and III 
A) I 
B) II 
C) III 
D) I, II, and III

Question 10

Studies of NAFTA have concluded that increases in the variety of
u.S.imports from Mexico are equivalent to about a ________
Per year reduction in Mexican import prices.

Accepted Answer

A) 100.2% 
B) 10.2% 
C) 1.2% 
D) 0.2% 
A) 100.2% 
B) 10.2% 
C) 1.2% 
D) 0.2%

Question 11

Larger countries will trade more with one another; this is
Empirically supported by:

Accepted Answer

A) the intra­industry trade. 
B) the increasing returns to scale. 
C) the gravity equation. 
D) the comparative advantage. 
A) the intra­industry trade. 
B) the increasing returns to scale. 
C) the gravity equation. 
D) the comparative advantage.

Question 12

A monopolist maximizes its profits by selling up to the point
Where:

Accepted Answer

A) its price equals its marginal cost. 
B) its price equals its marginal revenue. 
C) its marginal revenue equals its marginal costs. 
D) the difference between its price and average cost is maximized. 
A) its price equals its marginal cost. 
B) its price equals its marginal revenue. 
C) its marginal revenue equals its marginal costs. 
D) the difference between its price and average cost is maximized.

Question 13

Border effects can result from:

Accepted Answer

A) trade. 
B) tariffs. 
C) monopolistic competition. 
D) imperfect competition. 
A) trade. 
B) tariffs. 
C) monopolistic competition. 
D) imperfect competition.

Question 14

ABC Corporation is a monopolistic competitor.It has fixed costs of $5,000 and a
constant marginal cost of $500 per unit of production.It faces a demand curve
described by this equation:
P = 1,000 - 10Q.
A) Find ABC's equilibrium price and quantity.
B) Will it earn monopoly profits at this equilibrium?
C) What will happen to ABC's price, quantity, and monopoly profits in the long
run?

Accepted Answer

A) The demand curve for this equation ha

Question 15

In the long run, a monopolistically competitive firm that trades
Internationally ____________ than it would in autarky.

Accepted Answer

A) will produce more output 
B) will earn more monopoly profits 
C) will have higher average costs 
D) will produce more output and earn more monopoly profits 
A) will produce more output 
B) will earn more monopoly profits 
C) will have higher average costs 
D) will produce more output and earn more monopoly profits

Question 16

Economist Jan Tinbergen developed a formula, called ______,
To predict which nations would engage in bilateral trade.

Accepted Answer

A) the trade deficit equation 
B) the index of equality 
C) the Tinbergen ratio 
D) the gravity equation of trade 
A) the trade deficit equation 
B) the index of equality 
C) the Tinbergen ratio 
D) the gravity equation of trade

Question 17

At its current production level, a monopolist's marginal revenue
Is $20 and its marginal cost is $10.Which of the following is
CORRECT?

Accepted Answer

A) The monopolist should produce and sell more output. 
B) The monopolist should produce and sell less output. 
C) The monopolist is maximizing its profits at its current level of output. 
D) More information is required to decide if the firm needs to change its production. 
A) The monopolist should produce and sell more output. 
B) The monopolist should produce and sell less output. 
C) The monopolist is maximizing its profits at its current level of output. 
D) More information is required to decide if the firm needs to change its production.

Question 18

Studies of U.S.-Canadian free trade have concluded that free
Trade produced what effect on Canadian firms?

Accepted Answer

A) increased productivity 
B) decreased productivity 
C) no change in productivity 
D) could not be determined 
A) increased productivity 
B) decreased productivity 
C) no change in productivity 
D) could not be determined

Question 19

When average costs of production are falling, average cost:

Accepted Answer

A) is higher than marginal cost. 
B) is equal to price. 
C) is negative. 
D) is less than marginal cost. 
A) is higher than marginal cost. 
B) is equal to price. 
C) is negative. 
D) is less than marginal cost.

Which of the following is the gravity equation calculation?

The ____________ model best explains intraindustry trade.

U.S.Trade Adjustment Assistance:

Other things equal, the gravity equation predicts that the United States will have more trade with __ than with _.

Why would you expect firms with high research and development costs to be more interested in free trade?

(Table: Distances and GDP) According to the gravity equation, Which country should be the United States's smallest trade Partner?

In the long run, the equilibrium number of monopolistically Competitive firms with trade:

If exports of an industry are $100 million and imports are zero, Which of the following is the value of the index of intraindustry Trade?

Which of the following is (are) factors affecting the constant in Gravity equation estimates? I.tariffs and quotas II.customs' issues and finance and currency issues III.administrative barriers to trade

Studies of NAFTA have concluded that increases in the variety of u.S.imports from Mexico are equivalent to about a ________ Per year reduction in Mexican import prices.

Larger countries will trade more with one another; this is Empirically supported by:

A monopolist maximizes its profits by selling up to the point Where:

Border effects can result from:

In the long run, a monopolistically competitive firm that trades Internationally ____________ than it would in autarky.

Economist Jan Tinbergen developed a formula, called ______, To predict which nations would engage in bilateral trade.

At its current production level, a monopolist's marginal revenue Is $20 and its marginal cost is $10.Which of the following is CORRECT?

Studies of U.S.-Canadian free trade have concluded that free Trade produced what effect on Canadian firms?

When average costs of production are falling, average cost:

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

Which of the following is the gravity equation calculation?

The ____________ model best explains intra­industry trade.

U.S.Trade Adjustment Assistance:

Other things equal, the gravity equation predicts that the United States will have more trade with __________ than with _________.

Why would you expect firms with high research and development costs to be more interested in free trade?

(Table: Distances and GDP) According to the gravity equation, Which country should be the United States's smallest trade Partner?

In the long run, the equilibrium number of monopolistically Competitive firms with trade:

If exports of an industry are $100 million and imports are zero, Which of the following is the value of the index of intra­industry Trade?

Which of the following is (are) factors affecting the constant in Gravity equation estimates? I.tariffs and quotas II.customs' issues and finance and currency issues III.administrative barriers to trade

Studies of NAFTA have concluded that increases in the variety of u.S.imports from Mexico are equivalent to about a ________ Per year reduction in Mexican import prices.

Larger countries will trade more with one another; this is Empirically supported by:

A monopolist maximizes its profits by selling up to the point Where:

Border effects can result from:

In the long run, a monopolistically competitive firm that trades Internationally ____________ than it would in autarky.

Economist Jan Tinbergen developed a formula, called ______, To predict which nations would engage in bilateral trade.

At its current production level, a monopolist's marginal revenue Is $20 and its marginal cost is $10.Which of the following is CORRECT?

Studies of U.S.-Canadian free trade have concluded that free Trade produced what effect on Canadian firms?

When average costs of production are falling, average cost:

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 ____________ model best explains intraindustry trade.

Other things equal, the gravity equation predicts that the United States will have more trade with __ than with _.

If exports of an industry are $100 million and imports are zero, Which of the following is the value of the index of intraindustry Trade?