1. Compare to a monopolistically competitive firm with a higher marginal cost, a

Question

1. Compare to a monopolistically competitive firm with a higher marginal cost, a firm with a lower marginal cost will

a. earn lower profits

b. produce less output

c. set the same price because the firm is a price taker

d. set a lower price

2. When a U.S firm builds a new production facility abroad, that investment is considered

a. U.S. foreign direct investment inflows

b. brownfield foreign direct investment

c. greenfield foreign direct investment

d. cross-border mergers and acquisitions

3. Which of the following is true regarding trade costs associated with national borders?

a. Trade costs reduce the export sales of forms that do reach those customers across the border

b. Because of close proximity and intergrated economies, the U.S-CANADA border substantially increases traade columes between Canadian provinces and U.S states

c. In U.S. industries where exports represent a substantial proportion of total production, such as chemical, the majority of firms exports

d. Both B and C.

Explanation / Answer

c. set the same price because the firm is a price taker

d. cross-border mergers and acquisitions

b. Because of close proximity and intergrated economies, the U.S-CANADA border substantially increases traade columes between Canadian provinces and U.S states

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