Question 16 (1 point) Which of the following statements is NOT correct with resp

Question

Question 16 (1 point)

Which of the following statements is NOT correct with respect to intra-industry trade?

a) Compared with China, Canada has more significant intra-industry trade with the U.S.

b) Grubel–Lloyd index measures the degree of intra-industry trade for an industry. The higher is this index, the more significant the intra-industry trade is within this industry.

c) Intra-industry trade is more significant for North-South trade (i.e., trade between developing countries and developed countries) compared with trade between developed countries.

d) Internal economies of scale is one of the reasons causing intra-industry trade.

Question 17 (1 point)

Intra-industry trade is most common in the trade patterns of

a) the developing countries of Asia and Africa.

b) raw material producers.

c) the industrial countries of Western Europe.

d) China with the rest of the world.

e) labor-intensive products.

Question 18 (1 point)

A firm is said to enjoy internal economies of scale over the range of output for which the average cost is:

a) Increasing

b) Constant

c) Decreasing

Question 19 (1 point)

If a firm's output more than doubles when all inputs are doubled, production is said to occur under conditions of

a) increasing returns to scale.

b) imperfect competition.

c) intra-industry equilibrium.

d) constant returns to scale

e) decreasing returns to scale.

Question 20 (1 point)

Boeing aircraft company was able to cover its production costs of the first "jumbo jet" in the 1970s because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates:

Question 20 options:

a) How economies of scale make possible a larger variety of products in international trade

b) A transfer of wealth from domestic consumers to domestic producers as the result of trade

c) How a natural monopoly is forced to behave more competitively with international trade

d) How a natural monopoly is forced to behave less competitively with international trade

Question 21 (1 point)

Usually small countries can benefit more from trade caused by internal economies of scale. Which of the following is the reason?

a) With a much smaller domestic market, under autarky condition it is more difficult for small countries to reach internal economies of scale.

b) The terms of trade is better for small countries compared with large countries.

c) Large countries usually give more profit shares to small countries.

d) Small countries produce more compared with large countries.

Question 22 (1 point)

If some industries exhibit internal increasing returns to scale in each country, we should NOT expect to see

a) perfect competition in these industries.

b) intra-industry trade between countries.

c) lower price with trade

d) increased productivity in both countries.

Question 23 (1 point)

External economies of scale arise when the cost per unit

a) falls as the industry grows larger.

b) rises as the industry grows larger.

c) remains constant over a broad range of output.

d) is decided by individual firm's production level.

Question 24 (1 point)

Internal economies of scale arise when the cost per unit

a) falls as the average firm grows larger.

b) rises as the industry grows larger.

c) falls as the industry grows larger.

d) rises as the average firm grows larger.

e) remains constant over a broad range of output.

Question 25 (1 point)

External economies of scale will ________ average cost when output is ________ by ________.

a) reduce; increased; the industry

b) reduce; increased; a firm

c) increase; increased; a firm

d) increase; increased; the industry

e) reduce; reduce; the industry

Question 26 (1 point)

If two countries begin trade and both produce a product subject to external economies of scale, assuming the same supply and demand functions for these two countries, then the country with the ________ rate of production (i.e., initial lower price) will ________ production until it controls ________ of the market.

a) higher; increase; 100%

b) higher; increase; 50%

c) lower; increase; 100%

d) lower; increase; 50%

e) higher; decrease; 0%

Question 27 (1 point)

Imperfectly competitive firms have a demand curve that ________ and a marginal revenue curve that ________ and is ________ the demand curve.

a) is horizontal; is horizontal; the same as

b) slopes downward; is horizontal; above

c) is horizontal; slopes downward; below

d) slopes downward; slopes downward; the same as

e) slopes downward; slopes downward; below

Question 28 (1 point)

A firm in a monopolistic competition market will maximize profits by producing where

a) price is equal to marginal revenue.

b) price is equal to marginal cost.

c) marginal revenue is equal to marginal cost

d) total revenue is maximized.

Question 29 (1 point)

Which of the following is NOT correct about the trade caused by internal economics of scale?

a) Usually big countries benefit more from trade compared to small countries.

b) Consumers can benefit from lower price and more varieties.

c) Each existing firm produces more compared to autarky.

d) Average cost of each firm is lower compared to autarky.

Question 30 (1 point)

Under the model of monopolistic competition, if market sales/size increase(s), keeping other parameters constant, then the # of firms in the market _______; price __________; and quantity produced by each firm ______________.

a) increases, increases; decreases

b) increases, decreases; decreases

c) decreases; increases; increases

d) increases; decreases; increases.

a) Compared with China, Canada has more significant intra-industry trade with the U.S.

b) Grubel–Lloyd index measures the degree of intra-industry trade for an industry. The higher is this index, the more significant the intra-industry trade is within this industry.

c) Intra-industry trade is more significant for North-South trade (i.e., trade between developing countries and developed countries) compared with trade between developed countries.

d) Internal economies of scale is one of the reasons causing intra-industry trade.

Explanation / Answer

16.(d) internal economies of scale is one of the reason of this

Ans. There are many reasonn such as for reexport the items to other countries cause intra trde

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