Question 1

Entrepot trade occurs when a good is imported into a country and the same good is later exported to another country.

Accepted Answer

A) True 
 B)False

Question 2

The overlapping of demands between two countries would tend to reduce the amount that the two countries trade with one another.

Accepted Answer

A) True 
 B)False

Question 3

List and explain the welfare effects of intra-industry trade.

Accepted Answer

Intra-industry trade refers to the excha

Question 4

List and explain the reasons for intra-industry trade in homogeneous products.

Accepted Answer

Intra-industry trade in homogeneous prod

Question 5

Which of the following characterizes monopolistic competition?

Accepted Answer

A)  price collusion 
B)  price discrimination 
C)  product differentiation 
D)  price controls 
E)  perfectly elastic supply. 
A)  price collusion 
B)  price discrimination 
C)  product differentiation 
D)  price controls 
E)  perfectly elastic supply.

Question 6

According to the product-cycle model, comparative advantage always stays in the country where a product is invented.

Accepted Answer

A) True 
 B)False

Question 7

Use the Linder hypothesis to explain the fact that the U.S. simultaneously imports and exports automobiles.

Accepted Answer

The Linder hypothesis suggests that coun

Question 8

The product cycle refers to:

Accepted Answer

A)  the changing location of production of a particular good over time. 
B)  the changing of the marketing strategy for a particular good over time. 
C)  the changing nature of a particular good over time. 
D)  the changing pattern of comparative advantage over time. 
E)  trade in commodities. 
A)  the changing location of production of a particular good over time. 
B)  the changing of the marketing strategy for a particular good over time. 
C)  the changing nature of a particular good over time. 
D)  the changing pattern of comparative advantage over time. 
E)  trade in commodities.

Question 9

What is the relationship between economies of scale and intra-industry trade?

Accepted Answer

Economies of scale and intra-industry tr

Question 10

The theory of overlapping demands states that:

Accepted Answer

A)  average income levels determine the tastes and preferences of consumers within a country. 
B)  countries with a low average income are more likely to trade with countries with a high average income. 
C)  countries are likely to trade with other countries that have similar income levels. 
D)  both a and c 
E)  both b and c 
A)  average income levels determine the tastes and preferences of consumers within a country. 
B)  countries with a low average income are more likely to trade with countries with a high average income. 
C)  countries are likely to trade with other countries that have similar income levels. 
D)  both a and c 
E)  both b and c

Question 11

The product cycle is explanation for interindustry trade because as the product moves through its product cycle, there will be changes in the geographical location of where and how the product is produced.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a reason for IIT in homogeneous products?

Accepted Answer

A)  border trade 
B)  seasonal trade 
C)  trade in homogeneous services 
D)  product differentiation 
E)  All of the above 
A)  border trade 
B)  seasonal trade 
C)  trade in homogeneous services 
D)  product differentiation 
E)  All of the above

Question 13

Linder's hypothesis says that countries with similar preferences will trade more intensively with one another.

Accepted Answer

A) True 
 B)False

Question 14

Intra-industry trade is most common in:

Accepted Answer

A)  Latin America. 
B)  developing countries. 
C)  developed countries of Europe. 
D)  all countries. 
E)  None of the above 
A)  Latin America. 
B)  developing countries. 
C)  developed countries of Europe. 
D)  all countries. 
E)  None of the above

Question 15

Which of the following is not an explanation of intra-industry trade in homogeneous products?

Accepted Answer

A)  Foreign suppliers may be closer along the borders of a country than domestic suppliers. 
B)  Entrepot and re-export trade 
C)  Seasonal fluctuations in output or demand 
D)  Lack of resources to make a product domestically 
E)  None of the above 
A)  Foreign suppliers may be closer along the borders of a country than domestic suppliers. 
B)  Entrepot and re-export trade 
C)  Seasonal fluctuations in output or demand 
D)  Lack of resources to make a product domestically 
E)  None of the above

Question 16

Discuss the reasons why countries may engage in intra-industry trade.

Accepted Answer

Countries may engage in intra-industry t

Question 17

Which market structure is characterized by only a few firms?

Accepted Answer

A)  monopolistic competition 
B)  oligopoly 
C)  monopoly 
D)  perfect competition 
E)  limited competition. 
A)  monopolistic competition 
B)  oligopoly 
C)  monopoly 
D)  perfect competition 
E)  limited competition.

Question 18

Which gives consumers more product choices?

Accepted Answer

A)  no international trade 
B)  interindustry trade 
C)  intra-industry trade 
D)  autarky 
E)  all of the above 
A)  no international trade 
B)  interindustry trade 
C)  intra-industry trade 
D)  autarky 
E)  all of the above

Question 19

Intra-industry trade never occurs in homogeneous products.

Accepted Answer

A) True 
 B)False

Question 20

The theory of overlapping demands explains why trade often occurs between countries that have similar levels of per capita income.

Accepted Answer

A) True 
 B)False

Entrepot trade occurs when a good is imported into a country and the same good is later exported to another country.

The overlapping of demands between two countries would tend to reduce the amount that the two countries trade with one another.

List and explain the welfare effects of intra-industry trade.

List and explain the reasons for intra-industry trade in homogeneous products.

Which of the following characterizes monopolistic competition?

According to the product-cycle model, comparative advantage always stays in the country where a product is invented.

Use the Linder hypothesis to explain the fact that the U.S. simultaneously imports and exports automobiles.

The product cycle refers to:

What is the relationship between economies of scale and intra-industry trade?

The theory of overlapping demands states that:

The product cycle is explanation for interindustry trade because as the product moves through its product cycle, there will be changes in the geographical location of where and how the product is produced.

Which of the following is not a reason for IIT in homogeneous products?

Linder's hypothesis says that countries with similar preferences will trade more intensively with one another.

Intra-industry trade is most common in:

Which of the following is not an explanation of intra-industry trade in homogeneous products?

Discuss the reasons why countries may engage in intra-industry trade.

Which market structure is characterized by only a few firms?

Which gives consumers more product choices?

Intra-industry trade never occurs in homogeneous products.

The theory of overlapping demands explains why trade often occurs between countries that have similar levels of per capita income.

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

The Firm in the World Economy

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters

Exam 5: Intra-Industry Trade

Entrepot trade occurs when a good is imported into a country and the same good is later exported to another country.

The overlapping of demands between two countries would tend to reduce the amount that the two countries trade with one another.

List and explain the welfare effects of intra-industry trade.

List and explain the reasons for intra-industry trade in homogeneous products.

Which of the following characterizes monopolistic competition?

According to the product-cycle model, comparative advantage always stays in the country where a product is invented.

Use the Linder hypothesis to explain the fact that the U.S. simultaneously imports and exports automobiles.

The product cycle refers to:

What is the relationship between economies of scale and intra-industry trade?

The theory of overlapping demands states that:

The product cycle is explanation for interindustry trade because as the product moves through its product cycle, there will be changes in the geographical location of where and how the product is produced.

Which of the following is not a reason for IIT in homogeneous products?

Linder's hypothesis says that countries with similar preferences will trade more intensively with one another.

Intra-industry trade is most common in:

Which of the following is not an explanation of intra-industry trade in homogeneous products?

Discuss the reasons why countries may engage in intra-industry trade.

Which market structure is characterized by only a few firms?

Which gives consumers more product choices?

Intra-industry trade never occurs in homogeneous products.

The theory of overlapping demands explains why trade often occurs between countries that have similar levels of per capita income.

Introduction: An Overview of the World Economy

Why Countries Trade

Comparative Advantage and the Production Possibilities Frontier

Factor Endowments and the Commodity Composition of Trade

The Firm in the World Economy

International Factor Movements

Tariffs

Nontariff Distortions to Trade

International Trade Policy

Regional Economic Arrangements

International Trade and Economic Growth

National Income Accounting and the Balance of Payments

Exchange Rates and Their Determination: A Basic Model

Money, Interest Rates, and the Exchange Rate

Open Economy Macroeconomics

Macroeconomic Policy and Floating Exchange Rates

Fixed Exchange Rates and Currency Unions

International Monetary Arrangements

Capital Flows and the Developing Countries

Filters