Question 1

Which of the following is FALSE?

Accepted Answer

A) Economies of scale may be internal,external,or both. 
B) With internal economies of scale,the gains from trade include a wider selection of consumer choices and lower prices. 
C) With external economies of scale,the gains from trade are less certain since,in theory,they can lock in production in a less efficient country and prevent the development of production in a more efficient country. 
D) Internal economies of scale lead firms to regionally concentrate their industry. 
A) Economies of scale may be internal,external,or both. 
B) With internal economies of scale,the gains from trade include a wider selection of consumer choices and lower prices. 
C) With external economies of scale,the gains from trade are less certain since,in theory,they can lock in production in a less efficient country and prevent the development of production in a more efficient country. 
D) Internal economies of scale lead firms to regionally concentrate their industry.

Question 2

Economies of scale are an important determinant of comparative advantage based trade.

Accepted Answer

A) True 
 B)False

Question 3

Intraindustry trade can lead to lower prices and job creation in both the exporting and the importing nation.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States?

Accepted Answer

A) The product line requires quick turn-around time from or to delivery. 
B) The need to manage a just-in-time inventory system 
C) Wages are low and the production process is labor intensive. 
D) The product is heavy and bulky relative to its final value. 
A) The product line requires quick turn-around time from or to delivery. 
B) The need to manage a just-in-time inventory system 
C) Wages are low and the production process is labor intensive. 
D) The product is heavy and bulky relative to its final value.

Question 5

Suppose that the United States decided to subsidize a major research and development effort by U.S.firms in the semiconductor industry.Under the current rules of the WTO and GATT,the U.S.effort is

Accepted Answer

A) allowed as long as the subsidies are a small percent of the total cost. 
B) allowed as long as the subsidies do not involve a direct payment to the industry. 
C) not allowed. 
D) neither allowed nor disallowed. 
E) allowed as long as the subsidies are for developing a "precompetitive" technology. 
A) allowed as long as the subsidies are a small percent of the total cost. 
B) allowed as long as the subsidies do not involve a direct payment to the industry. 
C) not allowed. 
D) neither allowed nor disallowed. 
E) allowed as long as the subsidies are for developing a "precompetitive" technology.

Question 6

Trading French wine for California wine is an example of intraindustry trade.

Accepted Answer

A) True 
 B)False

Question 7

The United States does not use subsidies as part of its policies.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following does NOT indicate intraindustry trade?

Accepted Answer

A) Trading Jeeps for Toyotas 
B) Trading Boeing airplanes for Airbus airplanes 
C) Trading Bush beer for Heineken beer 
D) Trading Japanese-made films for Hollywood-made films 
E) Trading oil for trucks 
A) Trading Jeeps for Toyotas 
B) Trading Boeing airplanes for Airbus airplanes 
C) Trading Bush beer for Heineken beer 
D) Trading Japanese-made films for Hollywood-made films 
E) Trading oil for trucks

Question 9

Which of the following is FALSE?

Accepted Answer

A) Most of the maquiladora industry is located in the states of Mexico that border the United States. 
B) The maquiladora industry has not created much employment in Mexico because most of the production is capital intensive. 
C) The maquiladora industry accounts for more than half of Mexico's exports today. 
D) Growth in Mexico's northern border cities ,such as Tijuana and Ciudad Juarez,took off almost a decade before NAFTA because of the maquiladora industry. 
A) Most of the maquiladora industry is located in the states of Mexico that border the United States. 
B) The maquiladora industry has not created much employment in Mexico because most of the production is capital intensive. 
C) The maquiladora industry accounts for more than half of Mexico's exports today. 
D) Growth in Mexico's northern border cities ,such as Tijuana and Ciudad Juarez,took off almost a decade before NAFTA because of the maquiladora industry.

Question 10

Intraindustry trade relies on

Accepted Answer

A) economies of scale. 
B) the product cycle. 
C) differences in factor endowments. 
D) government industrial policies. 
E) monopoly pricing. 
A) economies of scale. 
B) the product cycle. 
C) differences in factor endowments. 
D) government industrial policies. 
E) monopoly pricing.

Question 11

One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because

Accepted Answer

A) it is more advantageous than interindustry trade. 
B) high-income industrial economies produce in the first stage of the product cycle. 
C) high-income industrial economies are wealthier than developing countries. 
D) high-income industrial economies have dissimilar resource endowments in absolute terms. 
E) it allows firms to take advantage of internal economies of scale. 
A) it is more advantageous than interindustry trade. 
B) high-income industrial economies produce in the first stage of the product cycle. 
C) high-income industrial economies are wealthier than developing countries. 
D) high-income industrial economies have dissimilar resource endowments in absolute terms. 
E) it allows firms to take advantage of internal economies of scale.

Question 12

Intraindustry trade tends to be more controversial than interindustry trade.

Accepted Answer

A) True 
 B)False

Question 13

Market failures occur whenever

Accepted Answer

A) private returns may be greater than social returns. 
B) social returns may be greater than private returns. 
C) the free market produces less than what is socially optimal. 
D) monopolies exist in a market. 
E) All of the above. 
A) private returns may be greater than social returns. 
B) social returns may be greater than private returns. 
C) the free market produces less than what is socially optimal. 
D) monopolies exist in a market. 
E) All of the above.

Question 14

An internal economies of scale is defined as

Accepted Answer

A) one whose size or scale effects are not located in the firm,but in the industry. 
B) one with falling costs over a specific level of output. 
C) one with falling costs over a relatively large range of output. 
D) one with falling costs over a relatively large range of output,but definite declining profits. 
A) one whose size or scale effects are not located in the firm,but in the industry. 
B) one with falling costs over a specific level of output. 
C) one with falling costs over a relatively large range of output. 
D) one with falling costs over a relatively large range of output,but definite declining profits.

Question 15

Which type of industry is likely to see more intraindustry trade?

Accepted Answer

The answer of Which type of industry is likely to...

Question 16

Most trade between Mexico and the United States is intrafirm.

Accepted Answer

A) True 
 B)False

Question 17

If countries have similar factor endowments and productivities,what type of trade are they most likely to have?

Accepted Answer

The answer of If countries have similar factor endowments and...

Question 18

Describe the two sources of economies of scale and how these economies of scale lead to intraindustry trade.

Accepted Answer

Internal economies of scale come from de

Question 19

Which of the following is NOT a reason social returns might be greater than private returns?

Accepted Answer

A) Excess competition between firms 
B) Knowledge spillovers 
C) Spillovers from research and development 
D) Capital market imperfections 
A) Excess competition between firms 
B) Knowledge spillovers 
C) Spillovers from research and development 
D) Capital market imperfections

Question 20

Internal economies of scale means that

Accepted Answer

A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. 
B) firms will have lower profits after international trade begins,because costs will be higher than when they just focused on the domestic market. 
C) consumers will have less choices once trade begins,because firms will be squeezed out of the market. 
D) simply expanding the size of the market the firm serves reduces overall per unit costs,since the firm can spread costs over more output. 
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. 
B) firms will have lower profits after international trade begins,because costs will be higher than when they just focused on the domestic market. 
C) consumers will have less choices once trade begins,because firms will be squeezed out of the market. 
D) simply expanding the size of the market the firm serves reduces overall per unit costs,since the firm can spread costs over more output.

Which of the following is FALSE?

Economies of scale are an important determinant of comparative advantage based trade.

Intraindustry trade can lead to lower prices and job creation in both the exporting and the importing nation.

Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States?

Suppose that the United States decided to subsidize a major research and development effort by U.S.firms in the semiconductor industry.Under the current rules of the WTO and GATT,the U.S.effort is

Trading French wine for California wine is an example of intraindustry trade.

The United States does not use subsidies as part of its policies.

Which of the following does NOT indicate intraindustry trade?

Which of the following is FALSE?

Intraindustry trade relies on

One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because

Intraindustry trade tends to be more controversial than interindustry trade.

Market failures occur whenever

An internal economies of scale is defined as

Which type of industry is likely to see more intraindustry trade?

Most trade between Mexico and the United States is intrafirm.

If countries have similar factor endowments and productivities,what type of trade are they most likely to have?

Describe the two sources of economies of scale and how these economies of scale lead to intraindustry trade.

Which of the following is NOT a reason social returns might be greater than private returns?

Internal economies of scale means that

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

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Exam 5: Beyond Comparative Advantage

Which of the following is FALSE?

Economies of scale are an important determinant of comparative advantage based trade.

Intraindustry trade can lead to lower prices and job creation in both the exporting and the importing nation.

Which of the following is NOT a situation providing a potential advantage for Mexico that makes it competitive compared to China in trade with the United States?

Suppose that the United States decided to subsidize a major research and development effort by U.S.firms in the semiconductor industry.Under the current rules of the WTO and GATT,the U.S.effort is

Trading French wine for California wine is an example of intraindustry trade.

The United States does not use subsidies as part of its policies.

Which of the following does NOT indicate intraindustry trade?

Which of the following is FALSE?

Intraindustry trade relies on

One reason that a large share of the trade between high-income industrial economies is intraindustry trade is because

Intraindustry trade tends to be more controversial than interindustry trade.

Market failures occur whenever

An internal economies of scale is defined as

Which type of industry is likely to see more intraindustry trade?

Most trade between Mexico and the United States is intrafirm.

If countries have similar factor endowments and productivities,what type of trade are they most likely to have?

Describe the two sources of economies of scale and how these economies of scale lead to intraindustry trade.

Which of the following is NOT a reason social returns might be greater than private returns?

Internal economies of scale means that

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

International Financial Crises

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters