Question 1

What is the product cycle? How is it related to intra-industry trade?

Accepted Answer

The product cycle refers to the stages t

Question 2

Overlapping demands has nothing to do with IIT.

Accepted Answer

A) True 
 B)False

Question 3

The intra-industry trade index is computed using the following formula:

Accepted Answer

A)  (X - M). 
B)  (X - M)/(X + M). 
C)  |X - M|/(X + M). 
D)  1 - |X - M|/(X + M). 
E)  (X + M)/(X - M). 
A)  (X - M). 
B)  (X - M)/(X + M). 
C)  |X - M|/(X + M). 
D)  1 - |X - M|/(X + M). 
E)  (X + M)/(X - M).

Question 4

Which of the following products would the product cycle least likely be applied to?

Accepted Answer

A)  TVs 
B)  Calculators 
C)  VCRs 
D)  Crude oil 
E)  limes. 
A)  TVs 
B)  Calculators 
C)  VCRs 
D)  Crude oil 
E)  limes.

Question 5

Economies of scale refers to the tendency for unit costs to increase with the level of output of the plant.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be an example of vertical product differentiation?

Accepted Answer

A)  rice 
B)  steel 
C)  cars 
D)  insurance 
E)  none of the above 
A)  rice 
B)  steel 
C)  cars 
D)  insurance 
E)  none of the above

Question 7

The exchange of automobiles between developed countries is an example of interindustry trade.

Accepted Answer

A) True 
 B)False

Question 8

In perfect competition, firms have little to no influence over the price of the product they produce.

Accepted Answer

A) True 
 B)False

Question 9

IIT enhances economic welfare in exactly the same way that trade based on factor abundance enhances welfare.

Accepted Answer

A) True 
 B)False

Question 10

Intra-industry trade:

Accepted Answer

A)  can be explained in the same way we explain trade in wheat or textiles. 
B)  cannot happen if the products in question are differentiated. 
C)  cannot occur if the market is characterized by monopolistic competition. 
D)  All of the above 
E)  None of the above 
A)  can be explained in the same way we explain trade in wheat or textiles. 
B)  cannot happen if the products in question are differentiated. 
C)  cannot occur if the market is characterized by monopolistic competition. 
D)  All of the above 
E)  None of the above

Question 11

Which of the following is one of the most important determinants of intra-industry trade?

Accepted Answer

A)  physical capital 
B)  human capital 
C)  unskilled labor 
D)  economies of scale 
E)  perfect competition 
A)  physical capital 
B)  human capital 
C)  unskilled labor 
D)  economies of scale 
E)  perfect competition

Question 12

Intra-industry trade only occurs in differentiated goods.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following industries would be associated with an IIT index close to zero?

Accepted Answer

A)  perfume 
B)  cars 
C)  beer 
D)  all of the above 
E)  none of the above 
A)  perfume 
B)  cars 
C)  beer 
D)  all of the above 
E)  none of the above

Question 14

Why would intra-industry trade occur between developed and developing countries?

Accepted Answer

Intra-industry trade refers to the excha

Question 15

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

Accepted Answer

A)  economies of scale 
B)  the product cycle 
C)  overlapping demands 
D)  factor proportions 
E)  All of the above 
A)  economies of scale 
B)  the product cycle 
C)  overlapping demands 
D)  factor proportions 
E)  All of the above

Question 16

The fact that the U.S. both imports tequila from Mexico and exports bourbon to Mexico is an example of interindustry trade.

Accepted Answer

A) True 
 B)False

Question 17

Which of following is not a reason for intra-industry trade in homogeneous products?

Accepted Answer

A)  identical and bulky materials 
B)  joint production of certain kinds of services 
C)  entrepot trade 
D)  product differentiation 
E)  None of the above 
A)  identical and bulky materials 
B)  joint production of certain kinds of services 
C)  entrepot trade 
D)  product differentiation 
E)  None of the above

Question 18

In the theory of overlapping demands, the gains from intra-industry trade are a result of:

Accepted Answer

A)  a greater variety of products. 
B)  increasing return to scale. 
C)  imperfect competition. 
D)  re-export trade. 
E)  entrepot trade. 
A)  a greater variety of products. 
B)  increasing return to scale. 
C)  imperfect competition. 
D)  re-export trade. 
E)  entrepot trade.

Question 19

An intra-industry trade index of 0 indicates that 100% of the trade is interindustry trade.

Accepted Answer

A) True 
 B)False

Question 20

Intra-industry trade in homogeneous products occurs because:

Accepted Answer

A)  foreign products are more expensive. 
B)  tariffs make domestic good affordable. 
C)  seasonal fluctuations. 
D)  lower domestic communication costs. 
E)  FDI. 
A)  foreign products are more expensive. 
B)  tariffs make domestic good affordable. 
C)  seasonal fluctuations. 
D)  lower domestic communication costs. 
E)  FDI.

What is the product cycle? How is it related to intra-industry trade?

Overlapping demands has nothing to do with IIT.

The intra-industry trade index is computed using the following formula:

Which of the following products would the product cycle least likely be applied to?

Economies of scale refers to the tendency for unit costs to increase with the level of output of the plant.

Which of the following would be an example of vertical product differentiation?

The exchange of automobiles between developed countries is an example of interindustry trade.

In perfect competition, firms have little to no influence over the price of the product they produce.

IIT enhances economic welfare in exactly the same way that trade based on factor abundance enhances welfare.

Intra-industry trade:

Which of the following is one of the most important determinants of intra-industry trade?

Intra-industry trade only occurs in differentiated goods.

Which of the following industries would be associated with an IIT index close to zero?

Why would intra-industry trade occur between developed and developing countries?

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

The fact that the U.S. both imports tequila from Mexico and exports bourbon to Mexico is an example of interindustry trade.

Which of following is not a reason for intra-industry trade in homogeneous products?

In the theory of overlapping demands, the gains from intra-industry trade are a result of:

An intra-industry trade index of 0 indicates that 100% of the trade is interindustry trade.

Intra-industry trade in homogeneous products occurs because:

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

What is the product cycle? How is it related to intra-industry trade?

Overlapping demands has nothing to do with IIT.

The intra-industry trade index is computed using the following formula:

Which of the following products would the product cycle least likely be applied to?

Economies of scale refers to the tendency for unit costs to increase with the level of output of the plant.

Which of the following would be an example of vertical product differentiation?

The exchange of automobiles between developed countries is an example of interindustry trade.

In perfect competition, firms have little to no influence over the price of the product they produce.

IIT enhances economic welfare in exactly the same way that trade based on factor abundance enhances welfare.

Intra-industry trade:

Which of the following is one of the most important determinants of intra-industry trade?

Intra-industry trade only occurs in differentiated goods.

Which of the following industries would be associated with an IIT index close to zero?

Why would intra-industry trade occur between developed and developing countries?

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

The fact that the U.S. both imports tequila from Mexico and exports bourbon to Mexico is an example of interindustry trade.

Which of following is not a reason for intra-industry trade in homogeneous products?

In the theory of overlapping demands, the gains from intra-industry trade are a result of:

An intra-industry trade index of 0 indicates that 100% of the trade is interindustry trade.

Intra-industry trade in homogeneous products occurs because:

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