Question 1

Horizontally differentiated goods are goods where the prices are similar but the goods differ slightly in some perceived manner.

Accepted Answer

A) True 
 B)False

Question 2

Since the welfare effects of intra-industry trade are difficult to calculate we can safely presume that they are extremely small.

Accepted Answer

A) True 
 B)False

Question 3

Economies of scale can only be internal to the firm.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a Ford and a Chevrolet is an example of horizontal product differentiation.

Accepted Answer

A) True 
 B)False

Question 5

If the cost of producing a product declines dramatically with increases in the level of output then:

Accepted Answer

A)  economies of scale (EOS) may be a source of comparative advantage. 
B)  countries with a large internal market may be more likely to have a comparative advantage in the production of this product. 
C)  the level of output and comparative advantage are unrelated. 
D)  both a and b 
E)  both b and c 
A)  economies of scale (EOS) may be a source of comparative advantage. 
B)  countries with a large internal market may be more likely to have a comparative advantage in the production of this product. 
C)  the level of output and comparative advantage are unrelated. 
D)  both a and b 
E)  both b and c

Question 6

Products subject to the product cycle usually are homogeneous products.

Accepted Answer

A) True 
 B)False

Question 7

Country A imports $60 in shirts and exports $40 in shirts. Its intra-industry trade index for shirts is:

Accepted Answer

A)  .8. 
B)  .2. 
C)  $10. 
D)  $90. 
E)  None of the above 
A)  .8. 
B)  .2. 
C)  $10. 
D)  $90. 
E)  None of the above

Question 8

A monopolist has market power because:

Accepted Answer

A)  it is a price maker. 
B)  it produces a unique product. 
C)  it has the ability to alter the market price of the product. 
D)  All of the above 
E)  None of the above 
A)  it is a price maker. 
B)  it produces a unique product. 
C)  it has the ability to alter the market price of the product. 
D)  All of the above 
E)  None of the above

Question 9

The factor-proportions theory adequately explains why countries engage in intra-industry trade.

Accepted Answer

A) True 
 B)False

Question 10

Intra-industry trade occurs mostly in differentiated products.

Accepted Answer

A) True 
 B)False

Question 11

The empirical evidence on IIT has shown that it works only for horizontal product differentiation.

Accepted Answer

A) True 
 B)False

Question 12

The product cycle follows which of the following production strategies?

Accepted Answer

A)  high-income domestic market, high-income non-domestic market, developing country market 
B)  developing country market, moderate-income market, high-income domestic market 
C)  high-income domestic market, moderate-income market, developing country market 
D)  high-income domestic market, developing country market 
E)  None of the above 
A)  high-income domestic market, high-income non-domestic market, developing country market 
B)  developing country market, moderate-income market, high-income domestic market 
C)  high-income domestic market, moderate-income market, developing country market 
D)  high-income domestic market, developing country market 
E)  None of the above

Question 13

Intra-industry trade:

Accepted Answer

A)  tends to be associated with differentiated products. 
B)  is never associated with vertically differentiated products. 
C)  rarely occurs between developed and developing countries. 
D)  can be dismissed as a data issue. 
E)  does not occur among developed countries. 
A)  tends to be associated with differentiated products. 
B)  is never associated with vertically differentiated products. 
C)  rarely occurs between developed and developing countries. 
D)  can be dismissed as a data issue. 
E)  does not occur among developed countries.

Horizontally differentiated goods are goods where the prices are similar but the goods differ slightly in some perceived manner.

Since the welfare effects of intra-industry trade are difficult to calculate we can safely presume that they are extremely small.

Economies of scale can only be internal to the firm.

The difference between a Ford and a Chevrolet is an example of horizontal product differentiation.

If the cost of producing a product declines dramatically with increases in the level of output then:

Products subject to the product cycle usually are homogeneous products.

Country A imports $60 in shirts and exports $40 in shirts. Its intra-industry trade index for shirts is:

A monopolist has market power because:

The factor-proportions theory adequately explains why countries engage in intra-industry trade.

Intra-industry trade occurs mostly in differentiated products.

The empirical evidence on IIT has shown that it works only for horizontal product differentiation.

The product cycle follows which of the following production strategies?

Intra-industry trade:

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

Horizontally differentiated goods are goods where the prices are similar but the goods differ slightly in some perceived manner.

Since the welfare effects of intra-industry trade are difficult to calculate we can safely presume that they are extremely small.

Economies of scale can only be internal to the firm.

The difference between a Ford and a Chevrolet is an example of horizontal product differentiation.

If the cost of producing a product declines dramatically with increases in the level of output then:

Products subject to the product cycle usually are homogeneous products.

Country A imports $60 in shirts and exports $40 in shirts. Its intra-industry trade index for shirts is:

A monopolist has market power because:

The factor-proportions theory adequately explains why countries engage in intra-industry trade.

Intra-industry trade occurs mostly in differentiated products.

The empirical evidence on IIT has shown that it works only for horizontal product differentiation.

The product cycle follows which of the following production strategies?

Intra-industry trade:

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