【国际经济学专题考试试卷十六】Monopolistic Competition
国际经济学选择题(有答案)
Multiple-Choice Questions Ch.21.The Mercantilists did not advocate:a. free tradeb. stimulating the nation's exportsc. restricting the nations' importsd. the accumulation of gold by the nation2.According to Adam Smith, international trade was based on:a. absolute advantageb. comparative advantagec. both absolute and comparative advantaged. neither absolute nor comparative advantage3.What proportion of international trade is based on absolute advantage?a. Allb. mostc. somed. none4.The commodity in which the nation has the smallest absolute disadvantage is the commodityof its:a. absolute disadvantageb. absolute advantagec. comparative disadvantaged. comparative advantage5.If in a two-nation (A and B), two-commodity (X and Y) world, it is established that nationA has a comparative advantage in commodity X, then nationB must have:a. an absolute advantage in commodity Yb. an absolute disadvantage in commodity Yc. a comparative disadvantage in commodity Yd. a comparative advantage in commodity Y6.If with one hour of labor time nation A can produce either 3X or 3Y while nation B canproduce either 1X or 3Y (and labor is the only input):a. nation A has a comparative disadvantage in commodity Xb. nation B has a comparative disadvantage in commodity Yc. nation A has a comparative advantage in commodity Xd. nation A has a comparative advantage in neither commodity7. With reference to the statement in Question 6:a. Px/Py=1 in nation Ab. Px/Py=3 in nation Bc. Py/Px=1/3 in nation Bd. all of the above8. With reference to the statement in Question 6, if 3X is exchanged for 3Y:a. nation A gains 2Xb. nation B gains 6Yc. nation A gains 3Yd. nation B gains 3Y9.With reference to the statement of Question 6, the range of mutually beneficial tradebetween nation A and B is:a. 3Y < 3X < 5Yb. 5Y < 3X < 9Yc. 3Y < 3X < 9Yd. 1Y < 3X < 3Y10. If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B:a. there will be no trade between the two nationsc. the relative price of Y is the same in both nationsd. all of the above11. Ricardo explained the law of comparative advantage on the basis of:a. the labor theory of valueb. the opportunity cost theoryc. the law of diminishing returnsd. all of the above12. Which of the following statements is true?a. The combined demand for each commodity by the two nations is negatively slopedb. the combined supply for each commodity by the two nations is rising stepwisec.the equilibrium relative commodity price for each commodity with trade is given by theintersection of the demand and supply of each commodity by the two nationsd. all of the above13. A difference in relative commodity prices between two nations can be based upon adifference in:a. factor endowmentsb. technologyc. tastesd. all of the above14. In the trade between a small and a large nation:a. the large nation is likely to receive all of the gains from tradeb. the small nation is likely to receive all of the gains from tradec. the gains from trade are likely to be equally sharedd. we cannot say15. The Ricardian trade model has been empiricallya. verifiedb. rejectedc. not testedd. tested but the results were inconclusiveMultiple-Choice Questions Ch.31. A production frontier that is concave from the origin indicates that the nation incursincreasing opportunity costs in the production of:a. commodity X onlyb. commodity Y onlyc. both commoditiesd. neither commodity2. The marginal rate of transformation (MRT) of X for Y refers to:a. the amount of Y that a nation must give up to produce each additional unit of Xb. the opportunity cost of Xc. the absolute slope of the production frontier at the point of productiond. all of the above3. Which of the following is not a reason for increasing opportunity costs:a. technology differs among nationsb. factors of production are not homogeneousc. factors of production are not used in the same fixed proportion in the production of allcommoditiesd. for the nation to produce more of a commodity, it must use resources that are less andless suited in the production of the commodity4. Community indifference curves:a. are negatively slopedb. are convex to the originc. should not cross5. The marginal rate of substitution (MRS) of X for Y in consumption refers to the:a.amount of X that a nation must give up for one extra unit of Y and still remain on thesame indifference curveb. amount of Y that a nation must give up for one extra unit of X and still remain on thesame indifference curvec.amount of X that a nation must give up for one extra unit of Y to reach a higherindifference curved.amount of Y that a nation must give up for one extra unit of X to reach a higherindifference curve6. Which of the following statements is true with respect to the MRS of X for Y?a. It is given by the absolute slope of the indifference curveb. declines as the nation moves down an indifference curvec. rises as the nation moves up an indifference curved. all of the above7. Which of the following statements about community indifference curves is true?a. They are entirely unrelated to individuals' community indifference curvesb. they cross, they cannot be used in the analysisc. the problems arising from intersecting community indifference curves can beovercome by the application of the compensation principled. all of the above.8. Which of the following is not true for a nation that is in equilibrium in isolation?a. It consumes inside its production frontierb. it reaches the highest indifference curve possible with its production frontierc. the indifference curve is tangent to the nation's production frontierd. MRT of X for Y equals MRS of X for Y, and they are equal to Px/Py9. If the internal Px/Py is lower in nation 1 than in nation 2 without trade:a. nation 1 has a comparative advantage in commodity Yb. nation 2 has a comparative advantage in commodity Xc. nation 2 has a comparative advantage in commodity Yd. none of the above10. Nation 1's share of the gains from trade will be greater:a. the greater is nation 1's demand for nation 2's exportsb. the closer Px/Py with trade settles to nation 2's pretrade Px/Pyc. the weaker is nation 2's demand for nation 1's exportsd. the closer Px/Py with trade settles to nation 1's pretrade Px/Py11. If Px/Py exceeds the equilibrium relative Px/Py with tradea. the nation exporting commodity X will want to export more of X than at equilibriumb. the nation importing commodity X will want to import less of X than at equilibriumc. Px/Py will fall toward the equilibrium Px/Pyd. all of the above12. With free trade under increasing costs:a. neither nation will specialize completely in productionb. at least one nation will consume above its production frontierc. a small nation will always gain from traded. all of the above13. Which of the following statements is false?a.The gains from trade can be broken down into the gains from exchange and the gainsfrom specializationb. gains from exchange result even without specializationc. gains from specialization result even without exchanged. none of the above14. The gains from exchange with respect to the gains from specialization are always:b. smallerc. equald. we cannot say without additional information15. Mutually beneficial trade cannot occur if production frontiers are:a. equal but tastes are notb. different but tastes are the samec. different and tastes are also differentd. the same and tastes are also the same.Multiple Choice Questions Ch.41. Which of the following statements is correct?a. The demand for imports is given by the excess demand for the commodityb. the supply of exports is given by the excess supply of the commodityc. the supply curve of exports is flatter than the total supply curve of the commodityd. all of the above2. At a relative commodity price above equilibriuma. the excess demand for a commodity exceeds the excess supply of the commodityb. the quantity demanded of imports exceeds the quantity supplied of exportsc. the commodity price will falld. all of the above3. The offer curve of a nation shows:a. the supply of a nation's importsb. the demand for a nation's exportsc. the trade partner's demand for imports and supply of exportsd. the nation's demand for imports and supply of exports4. The offer curve of a nation bulges toward the axis measuring the nation'sa. import commodityb. export commodityc. export or import commodityd. nontraded commodity5. Export prices must rise for a nation to increase its exports because the nation:a. incurs increasing opportunity costs in export productionb. faces decreasing opportunity costs in producing import substitutesc. faces decreasing marginal rate of substitution in consumptiond. all of the above6. Which of the following statements regarding partial equilibrium analysis is false?a. It relies on traditional demand and supply curvesb. it isolates for study one marketc. it can be used to determine the equilibrium relative commodity price but not theequilibrium quantity with traded. none of the above7. Which of the following statements regarding partial equilibrium analysis is true?a.The demand and supply curves are derived from the nation's production frontier andindifference mapb. It shows the same basic information as offer curvesc. It shows the same equilibrium relative commodity prices as with offer curvesd. all of the above8. In what way does partial equilibrium analysis differ from general equilibrium analysis?a. The former but not the latter can be used to determine the equilibrium price with tradeb.the former but not the latter can be used to determine the equilibrium quantity with tradec.the former but not the latter takes into consideration the interaction among all marketsin the economyd. the former gives only an approximation to the answer sought.a. 3/4b. 2/3c. 3/2d. 4/310. If the terms of trade increase in a two-nation world, those of the trade partner:a. deteriorateb. improvec. remain unchangedd. any of the above11. If a nation does not affect world prices by its trading, its offer curve:a. is a straight lineb. bulges toward the axis measuring the import commodityc. intersects the straight-line segment of the world's offer curved. intersects the positively-sloped portion of the world's offer curve12. If the nation's tastes for its import commodity increases:a. the nation's offer curve rotates toward the axis measuring its import commodityb. the partner's offer curve rotates toward the axis measuring its import commodityc. the partner's offer curve rotates toward the axis measuring its export commodityd. the nation's offer curve rotates toward the axis measuring its export commodity13. If the nation's tastes for its import commodity increases:a. the nation's terms of trade remain unchangedb. the nation's terms of trade deterioratec. the partner's terms of trade deteriorated. any of the above14. If the tastes for a nation import commodity increases, trade volume:a. increasesb. declinesc. remains unchangedd. any of the above15. A deterioration of a nation's terms of trade causes the nation's welfare to:a. deteriorateb. improvec. remain unchangedd. any of the aboveMultiple-Choice Questions ch.51. The H-O model extends the classical trade model by:a. explaining the basis for comparative advantageb. examining the effect of trade on factor pricesc. both a and bd. neither a nor b2. Which is not an assumption of the H-O modela. the same technology in both nationsb. constant returns to scalec. complete specializationd. equal tastes in both nations3. With equal technology nations will have equal K/L in production if:a. factor prices are the sameb. tastes are the samec. production functions are the samed. all of the above4. We say that commodity Y is K-intensive with respect to X when:a. more K is used in the production of Y than Xc. a lower L/K ratio is used in the production of Y than Xd. a higher K/L is used in the production of X than Y5. When w/r falls, L/Ka. falls in the production of both commoditiesb. rises in the production of both commoditiesc. can rise or falld. is not affected6. A nation is said to have a relative abundance of K if it has a:a. greater absolute amount of Kb. smaller absolute amount of Lc. higher L/K ratiod. lower r/w7. A difference in relative commodity prices between nations can be based on a difference in:a. technologyb. factor endowmentsc. tastesd. all of the above8. In the H-O model, international trade is based mostly on a difference in:a. technologyb. factor endowmentsc. economies of scaled. tastes9. According to the H-O-S model, trade reduces international differences in:a. relative but not absolute factor pricesb. absolute but not relative factor pricesc. both relative and absolute factor pricesd. neither relative nor absolute factor prices10. According to the H-O-S model, international trade will:a. reduce international differences in per capita incomesb. increases international differences in per capita incomesc. may increase or reduce international differences in per capita incomesd. lead to complete specialization11. The H-O model is a general equilibrium model because it deals with:a. production in both nationsb. consumption in both nationsc. trade between the two nationsd. all of the above12. The H-O model is a simplification of the a truly general equilibrium modelbecause it deals with:a. two nationsb. two commoditiesc. two factors of productiond. all of the above13. The Leontief paradox refers to the empirical finding that U.S.a. import substitutes are more K-intensive than exportsb. imports are more K-intensive than exportsc. exports are more L-intensive than importsd. exports are more K-intensive than import substitutes14. From empirical studies, we conclude that the H-O theory:a. must be rejectedb. must be accepted without reservationsc. can be accepted while awaiting further testing15. For factor reversal to occur, two commodities must be produced with:a. sufficiently different elasticity of substitution of factorsb. the same K/L ratioc. technologically-fixed factor proportionsd. equal elasticity of substitution of factorsMultiple-Choice Questions Ch. 6:1. Relaxing the assumptions on which the Heckscher-Ohlin theory rests:a. leads to rejection of the theoryb. leaves the theory unaffectedc. requires complementary trade theoriesd. any of the above.1.Which of the following assumptions of the Heckscher-Ohlin theory, when relaxed, leavethe theory unaffected?a. Two nations, two commodities, and two factorsb. both nations use the same technologyc. the same commodity is L-intensive in both nationsd. all of the above2.Which of the following assumptions of the Heckscher-Ohlin theory, when relaxed,require new trade theories?a. Economies of scaleb. incomplete specializationc. similar tastes in both nationsd. the existence of transportation costs3.International trade can be based on economies of scale even if both nations have identical:a. factor endowmentsb. tastesc. technologyd. all of the above5. A great deal of international trade:a. is intra-industry tradeb. involves differentiated productsc. is based on monopolistic competitiond. all of the above6. The Heckscher-Ohlin and new trade theories explains most of the trade:a. among industrial countriesb. between developed and developing countriesc. in industrial goodsd. all of the above4.The theory that a nation exports those products for which a large domestic market existswas advanced by:a. Linderb. Vernonc. Leontiefd. Ohlin8. Intra-industry trade takes place:a. because products are homogeneousb. in order to take advantage of economies of scalec. because perfect competition is the prevalent form of market organizationd. all of the above1.If a nation exports twice as much of a differentiated product that it imports, its intra-industry (T) index is equal to:a. 1.00c. 0.666d. 0.2510. Trade based on technological gaps is closely related to:a. the H-O theoryb. the product-cycle theoryc. Linder's theoryd. all of the above11. Which of the following statements is true with regard to the product-cycle theory?a. It depends on differences in technological changes over time among countriesb. it depends on the opening and the closing of technological gaps among countriesc. it postulates that industrial countries export more advanced products to lessadvanced countriesd. all of the above12. Transport costs:a. increase the price in the importing countryb. reduces the price in the exporting countryc. both of the aboved. neither a nor b.13. Transport costs can be analyzed:a. with demand and supply curvesb. production frontiersc. offer curvesd. all of the above14. The share of transport costs will fall less heavily on the nation:a. with the more elastic demand and supply of the traded commodityb. with the less elastic demand and supply of the traded commodityc. exporting agricultural productsd. with the largest domestic market15. A footloose industry is one in which the product:a. gains weight in processingb. loses weight in processingc. both of the aboved. neither a nor b.Multiple-choice Questions Ch.81. Which of the following statements is incorrect?a.An ad valorem tariff is expressed as a percentage of the value of the tradedcommodityb. a specific tariff is expressed as a fixed sum of the value of the traded commodity.c. export tariffs are prohibited by the U.S. Constitutiond. The U.S. uses exclusively the specific tariff2. A small nation is one:a. which does not affect world price by its tradingb. which faces an infinitely elastic world supply curve for its import commodityb.whose consumers will pay a price that exceeds the world price by the amount of thetariffd. all of the above3. If a small nation increases the tariff on its import commodity, its:a. consumption of the commodity increasesb. production of the commodity decreasesc. imports of the commodity increased. none of the above4.The increase in producer surplus when a small nation imposes a tariff is measured by thea. to the left of the supply curve between the commodity price with and without thetariffb. under the supply curve between the quantity produced with and without the tariffc. under the demand curve between the commodity price with and without the tariffd. none of the above.5. If a small nation increases the tariff on its import commodity:a. the rent of domestic producers of the commodity increasesb. the protection cost of the tariff decreasesc. the deadweight loss decreasesd. all of the above6. Which of the following statements is incorrect with respect to the rate of effectiveprotection?a. for given values of ai and ti, g is larger the greater is tb. for a given value of t and ti, g is larger the greater is a ic. g exceeds, is equal to or is smaller than t, as t i is smaller than, is equal to or islarger than td. when a i t i exceeds t, the rate of effective protection is positive7. With a i=50%, t i=0, and t=20%, g is:a. 40%b. 20%c. 80%d. 08. The imposition of an import tariff by a small nation:a. increases the relative price of the import commodity for domestic producers andconsumersb.reduces the relative price of the import commodity for domestic producers andconsumersc. increases the relative price of the import commodity for the nation as a wholed. any of the above is possible9. The imposition of an import tariff by a small nation:a. increases the nation's welfareb. reduces the nation's welfarec. leaves the nation's welfare unchangedd. any of the above is possible10. According to the Stolper-Samuelson theorem, the imposition of a tariff by a nation:a. increases the real return of the nation's abundant factorb. increases the real return of the nation's scarce factorc. reduces the real return of the nation's scarce factord. any of the above is possible11. The imposition of an import tariff by a nation results in:a. an increase in relative price of the nation's import commodityb. an increase in the nation's production of its importable commodityc. reduces the real return of the nation's abundant factord. all of the above12. The imposition of an import tariff by a nation can be represented by a rotation of the:a. nation's offer curve away from the axis measuring the commodity of its comparativeadvantageb.the nation's offer curve toward the axis measuring the commodity of its comparativeadvantagec.the other nation's offer curve toward the axis measuring the commodity of itscomparative advantaged.the other nation's offer curve away from the axis measuring the commodity of its13. The imposition of an import tariff by a large nation:a. increases the nation's terms of tradeb. reduces the volume of tradec. may increase or reduce the nation's welfared. all of the above14. The imposition of an optimum tariff by a large nation:a. improves its terms of tradeb. reduces the volume of tradec. increases the nation's welfared. all of the above15. The optimum tariff for a small nation is:a. 100%b. 50%c. 0d. depends on elasticitiesMultiple-choice Questions Ch. 9:1. An import quota:a. increases the domestic price of the imported commodityb. reduces domestic consumptionc. increases domestic productiond. all of the above2. An increase in the demand of the imported commodity subject to a given import quota:a. reduces the domestic quantity demanded of the commodityb. increases the domestic production of the commodityc. reduces the domestic price of the commodityd. reduces the producers' surplus3. Adjustment to any shift in the domestic demand or supply of an importable commodityoccurs:a. in domestic price with an import quotab. in the quantity of imports with a tariffc. through the market mechanism with an import tariff but not with an import quotad. all of the above4. An international cartel refers to:a. dumpingb. an organization of exportersc. an international commodity agreementd. voluntary export restraints5. The temporary sale of a commodity at below cost or at a lower price abroad in order todrive foreign producers out of business is called:a. predatory dumpingb. sporadic dumpingc. continuous dumpingd. voluntary export restraints6. The type of dumping which would justify antidumping measures by the country subjectto the dumping is:a. predatory dumpingb. sporadic dumpingc. continuous dumpingd. all of the above7. A fallacious argument for protection is:a. the infant industry argumentb. protection for national defensed. to correct domestic distortions8. Which of the following is true with respect to the infant-industry argument for protection:a. it refers to temporary protection to establish a domestic industryb.to be valid, the return to the grown-up industry must be sufficiently high also to repayfor the higher prices paid by domestic consumers of the commodity during the infancyperiodc. is inferior to an equivalent production subsidy to the infant industryd. all of the above9. Which of the following is false with respect to strategic trade policy?a. it postulates that a nation can gain by an activist trade policyb. it is practiced to some extent by most industrial nationsc. it can easily be carried outd. all of the above10. Industrial policy refers to:a.a n activist policy by the government of an industrial country to stimulate thedevelopment of an industryb.the granting of a subsidy to a domestic industry to stimulate the development of anindustryc. the granting of a subsidy to a domestic industry to counter a foreign subsidyd. all of the above11. Game theory refers to:a. a method of choosing the optimal strategy in conflict situationsb. the granting of a subsidy to correct a domestic distortionc. the theory of tariff protectiond. none of the above12. Trade protection in the United States is usually provided to:a. low-wage workersb. well-organized industries with large employmentc. industries producing consumer productsd. all of the above13. The most-favored-nation principle refers to:a. extension to all trade partners of any reciprocal tariff reduction negotiated by theU.S. with any of its trade partnersb. multilateral trade negotiationc. the General Agreement on Tariffs and Traded. the International Trade Organization14. On which of the following principles does GATT rest?a. nondiscriminationb. elimination of nontariff barriersc. consultation among nations in solving trade disputesd. all of the above15. Which of the following was not negotiated under the Uruguay Round?a. reduction of tariffs on industrial goodsb. replacement of quotas with tariffsc. reduction of subsidies on industrial products and on agricultural exportsd. liberalization in trade in most servicesMultiple-choice Questions for Ch. 131. Which of the following is false?a. A credit transaction leads to a payment from foreignersb. A debit transaction leads to a payment to foreignersc. A credit transaction is entered with a negative signd. Double-entry bookkeeping refers to each transaction entered twice.2. Which of the following is a debit?a. The export of goodsb. The export of servicesc. Unilateral transfers given to foreignersd. Capital inflows3. Capital inflows:a. refer to an increase in foreign assets in the nationb. refer to a reduction in the nation's assets abroadc. lead to a payment from foreignersd. all of the above4. When a U.S. firm imports goods to be paid in three months the U.S. credits:a. the current accountb. unilateral transfersc. capitald. official reserves5.The receipt of an interest payment on a loan made by a U.S. commercial bank to a foreignresident is entered in the U.S. balance of payments as a:a. credit in the capital accountb. credit in the current accountc. credit in official reservesd. debit in unilateral transfers6. The payment of a dividend by an American company to a foreign stockholder represents:a. a debit in the U.S. capital accountb. a credit in the U.S. capital accountc. a credit in the U.S. official reserve accountd. a debit in the U.S. current account7 .When a U.S. firm imports a good from England a pays for it by drawing on its poundsterling balances in a London Bank, the U.S. debits its current account and credits its:a. official reserve accountb. unilateral transfers accountc. services in its current accountd. capital account8. When the U.S. ships food aid to a developing nation, the U.S. debits:a. unilateral transfersb. servicesc. capitald. official reserves9. When the resident of a foreign nation (1) sells a U.S. stock and (2) deposits the proceeds ina U.S. bank, the U.S.:a. credits capital for (1) and debits capital for (2)b. credits the current account and debits capitalc. debits capital and credits official reservesd. debits capital for (1) and credits capital for (2)1.When a U.S. resident (1) purchases a foreign treasury bill and pays by (2) drawing down hisbank balances abroad:a. debits short-term capital and credits official reservesb. debits capital for (1) and credits capital for (2)c. debits official reserves and credits capitald. credits short-term capital and debits official reserves11. From the U.S. point of view, drawing on (reducing) foreign bank balances in a New Yorkbank represents a:a. capital inflow。
曼昆《经济学原理》17 monopolistic_competition--(汉魅HanMei—经济金融类汇总分享)
Copyright © 2004 South-Western
Figure 3 Monopolistic versus Perfect Competition
(a) Monopolistically Competitive Firm Price MC Price
(b) Perfectly Competitive Firm
ATC
MC
ATC
P
P = MC
P = MR (demand curve)
MR
Demand
0
Quantity produced
Efficient scale
Quantity
0
Quantity produced = Efficient scale
Quantity
Copyright©2003 Southwestern/Thomson Learning
• There are two noteworthy differences between monopolistic and perfect competition—excess capacity and markup.
Copyright © 2004 South-Western
Monopolistic versus Perfect Competition
Ch 16 - Monopolistic Competition
Advertising
▪ In monopolistically competitive industries,
below the socially efficient quantity.
▪ Yet, not easy for policymakers to fix this
problem: Firms earn zero profits, so cannot require them to reduce prices.
many
free entry/exit
yes
long-run econ. profits zero
the products firms sell identical
firm
has market power?
none, pricetaker
D curve facing firm
horizontal
Monopolistic competition
market, taking some demand away from existing firms, prices and profits fall.
• If losses in the short run: Some firms exit the
market, remaining firms enjoy higher demand and prices.
1. Excess capacity
▪ The monopolistic competitor operates on the
M08_克鲁格曼国际经济学
– Thus all firms should charge the same price and have equal share of the market Q = S/n
AC = C/Q = F/Q + c
• Marginal cost is the cost of producing an additional unit of output.
• A larger firm is more efficient because average cost decreases as output Q increases: internal economies of scale.
• This situation occurs when there are only a few major producers of a particular good or when each firm produces a good that is differentiated from that of rival firms.
• Study why those better-performing firms have a greater incentive to engage in the global economy.
The Theory of Imperfect Competition
• In imperfect competition, firms are aware that they can influence the prices of their products and that they can sell more only by reducing their price.
国际经济学题库(英文版)
Part Ⅰ。
Fill in the blank with suitable content.1.Seven themes recur throughout the study of international economics. These are the gains from trade ， the pattern of trade ， protectionism the balance of payments ， exchange rate determination ， international policy coordination ， international capital market.2。
Countries engage in international trade for two basic reasons ： comparative advantage and economics of scale 。
3。
A country has a comparative advantage in producing a good if the opportunity cost of producing that good in terms of other goods is lower in that country than it is in other countries.4。
Labor is the only one factor of production. LC a 、LW a and *LC a 、*LW a are the unit labor requirement in cheese and wine at Home and Foreign ， respectively 。
If aLC/aLW<aLC*/aLW* ， Home has a comparative advantage in cheese 。
英文版微观经济学复习提纲Chapter 10. Monopolistic competition
10Monopolistic Competition: The Competitive Model in a More RealisticSettingChapter SummaryMost markets in Australia have many buyers and sellers, low entry barriers and differentiated goods and services for sale. These are characteristics of monopolistic competition. Each monopolistically competitive firm faces a downward-sloping demand curve so marginal revenue is less than price. Firms maximise profit by producing the level of output that makes marginal revenue equal marginal cost. The firm may earn an economic profit or suffer an economic loss in the short run. Since there are low entry barriers, economic profits will cause new firms to enter the market. A firm that earns short-run profits will earn zero economic profit in the long run as entry from new firms shifts the firm’s demand curve to the left and causes it to become more elastic. If a firm suffers economic losses in the short run, other firms will exit the market and shift the firm’s demand curve to the right and cause it to become less elastic. In the long run, the firm’s demand curve will be tangent to its long-run average total cost curve, but average total cost will be greater than its minimum level.Monopolistic competition and perfect competition differ in their long-run equilibrium positions. Monopolistically competitive firms charge a price greater than marginal cost and they do not produce at minimum average total cost. A monopolistically competitive firm has excess capacity. If it increases its output it could produce at a lower average cost. But consumers benefit from being able to purchase a product that is differentiated and more closely suited to their tastes.Firms can use marketing to differentiate their products. Marketing tools include brand management and advertising.Learning ObjectivesWhen you finish this chapter you should be able to:1.Explain why a monopolistically competitive firm has a downward-sloping demand curve.A monopolistically competitive firm is able to raise its price without losing all of its customers.Some customers are willing to pay the higher price because the firm has a favourable location, can offer better service or a higher quality product, among other reasons.2.Explain how a monopolistically competitive firm decides the quantity to produce and theprice to charge. All firms maximise profits by producing where marginal revenue is equal to marginal cost. Since price is greater than marginal revenue, a monopolistically competitive firmMonopolistic competition: the competitive market in a more realistic setting 154 produces where price is greater than marginal cost. The firm will earn economic profits if its price exceeds average total cost in the short run.3.Analyse the situation of a monopolistically competitive firm in the long run. Since entrybarriers are low in monopolistically competitive industries, short-run profits give entrepreneurs an incentive to enter the market and establish new firms. The entry of new firms will shift the demand curves of existing firms to the left and make them more elastic. If firms suffer short-run economic losses, some firms will exit the industry in the long run. This will shift the demand curves of remaining firms to the right and make them more inelastic. In the long run, the demand curve of a typical firm will be tangent to its average total cost curve.pare the efficiency of monopolistic competition and perfect competition. In the long runthe profit-maximising level of output for a monopolistically competitive firm occurs where price is greater than marginal cost and the firm is not at the minimum point of its average total cost curve. Unlike a perfectly competitive firm, a monopolistically competitive firm does not achieve allocative efficiency or productive efficiency.5.Define marketing and explain how firms use it to differentiate their products. Marketingrefers to all the activities necessary for a firm to sell a product to consumers. Firms use brand management and advertising to earn profits and defend profits from competitors.6.Identify the key factors that determine a firm’s profitability. The most important factorsunder a firm’s control are its ability to differentiate its product and to produce at a lower average cost than competing firms. Other factors that affect profitability are not under a firm’s control.These factors include the prices of the inputs it uses in production and random chance. Chapter ReviewChapter Opener: Starbucks: Growth through Product DifferentiationSince the first Starbucks coffee shop opened in 1971, the firm has grown into a worldwide company. But the growth has been in the number of shops, over 8,000, rather than the size of the shops themselves. Starbucks faces competition from other firms. Neighbourhoods often have three or more coffeehouses. Barriers to entry into the market for coffeehouses are low and firms differentiate their products by offering different menus and services.Demand and Marginal Revenue for a Firm in a Monopolistically Competitive MarketMonopolistic competition is a market structure in which barriers to entry are low, and many firms compete by selling similar, but not identical, products. Production differentiation allows monopolistically competitive firms to raise their prices without losing all their customers. (A price increase will, however, cause some customers to switch to another similar product.)The control monopolistically competitive firms have over their prices is limited because they face competition from firms selling similar products. Since firms face downward-sloping demand curves when marginal revenue is less than price.10155 ChapterHelpful Study HintRestaurants, convenience stores, bookstores and petrol stations are all examples ofmonopolistically competitive firms. Petrol stations display their prices so thatdifferences between stations can easily be compared. Many motorists are willing tobuy at a slightly higher per litre price if a station is in a more convenient location thana station that offers a lower price. Some consumers believe there are differencesbetween various brands of petrol. These customers are willing to pay a somewhathigher price for what they perceive as a superior product. The next time you drive orride in a car, notice how much difference there is between the prices charged by thestations you pass.How a Monopolistically Competitive Firm Maximises Profits in the Short RunAs with firms in other markets, a monopolistically competitive firm will maximise profits by producing the level of output that makes marginal revenue (MR) equal to marginal cost (MC). Because the MR curve lies below the firm’s demand curve, the firm will maximise profits where price (P) exceeds MC.Helpful Study HintThe table and graph in Figure 10.4 provide an example of a firm that makes a short-run profit. Notice that (a) the relevant values for MR, MC and ATC are determined atthe profit-maximising quantity, or where MR=MC, (b) when firms earn profits theATC curve crosses the demand curve at two points, and (c) at the profit maximisingoutput P > MR.What Happens to Profits in the Long Run?Short-run profits give entrepreneurs an incentive to enter a market and establish new firms. The demand curve of an established firm shifts to the left as new firms enter the market. Entry will continue until the firm’s demand curve is tangent to its ATC curve. In the long run, the firm’s price will equal average total cost, the firm breaks even and the firm’s demand curve becomes more elastic.Short-run losses will lead some firms to exit their market. As a result, the demand curve for a firm remaining in the market shifts to the right and becomes less elastic. The exit of firms continues until the representative firm can charge a price equal to the average total cost in the long run.Monopolistic competition: the competitive market in a more realistic setting 156Helpful Study HintThis section of the textbook contains several features to help you understand thetransition of the market from short-run to long-run equilibrium. Don’t Let ThisHappen to You! (pages 321-2) warns you not to confuse economic and accountingprofit. Graphs in Figure 10.5 (page 320) illustrate the short run for a firm earningprofits and how these profits are eliminated in the long run firm. Table 10.2 (page321) offers a comprehensive graphical summary of the short run and long run for amonopolistically competitive firm. Making the Connection 10.1 (page 322) andSolved Problem 10.2 (page 322) use the experience of Apple Computers to analysethe short run and long run under monopolistic competition. Making the Connection10.2 describes the efforts of a cosmetics company to stay ahead of its competition.Comparing Perfect Competition and Monopolistic CompetitionThere are two important differences between long-run equilibrium perfect competition and monopolistic competition. Monopolistically competitive firms charge a price greater than marginal cost and they do not produce at minimum average total cost. Since price exceeds marginal cost, allocative efficiency is not achieved, and since price is greater than minimum average total cost, productive efficiency is not achieved. Monopolistically competitive firms have excess capacity. Despite these characteristics, consumers benefit from purchasing products that are differentiated.Helpful Study HintAlthough monopolistic competition appears to fall short of perfect competition interms of economic efficiency, the textbook rightly notes that consumers are willing topay for the variety offered by monopolistically competitive firms. Consider usingpetrol stations once again as an example. Let’s say there are three petrol stations on asingle street corner. During most hours of the day at least one or two of the stationsare not busy; one can interpret this as excess capacity. But during rush hours all threestations have customers. Enough drivers are willing to pay to keep all three stationsoperating for the convenience of not waiting in long lines during peak hours.Supermarkets offer another example of consumers’ willingness to pay for greaterconvenience. Most supermarkets open additional check-out lines – some forconsumers with just a few items to buy – when long lines start to form.How Marketing Differentiates ProductsFirms can differentiate their products through marketing. Marketing refers to all the activities necessary for a firm to sell a product to a consumer. Firms use two marketing tools to differentiate their products. The first marketing tool is brand management. Brand management refers to the actions of a firm157 Chapter10intended to maintain the differentiation of a product over time. Economic profits are earned when a firm introduces a new product, but this leads to the entry of firms producing similar products and the profits are eliminated. Firms use brand management to put off the time when they will no longer be able to earn profits. The second marketing tool is advertising. Advertising shifts the demand curve for a product to the right and makes the demand curve more inelastic. Successful advertising allows the firm to sell more at every price. Advertising also increases costs. If the increase in revenue from advertising exceeds the costs, profits will rise.Once a firm has established a brand name it has an incentive to defend it. Firms can apply for a trademark. A trademark grants legal protection against other firms using a product’s name. Companies will spend substantial amounts of money to ensure that their brand names are entitled to legal protection. If firms do not prevent the unauthorised use of their trademarks, they may be no longer entitled to legal protection.What Makes a Firm Successful?A firm can control some of the factors that allow it to make economic profits. Other factors are uncontrollable. Controllable factors include the ability a firm has to differentiate its product and the ability a firm has to produce at a lower average total cost than competing firms. Uncontrollable factors include input prices, changes in consumer tastes and random chance.Solved ProblemChapter 10 in the textbook includes two Solved Problems to support learning objectives 2 (“Explain how a monopolistically competitive firm decides the quantity to produce and the price to charge”) and 3 (“Analyse the situation of a monopolistically competitive firm in the long run”). The following Solved Problem supports another of this chapter’s learning objectives.Solved Problem 12-3 Supports learning objective 5: Define marketing and explain how firms use it to differentiate their products.We Came. We Marketed. We Sold.3Com Corporation was incorporated in the U.S. in 1979 and specialises in providing computer network devices such as routers and network switches. Among 3Com’s clients are businesses that want to improve the communication and security capabilities of their computer systems. 3Com is not a household name in the manner of McDonald’s or Microsoft, but marketing is an important part of the company’s success. It faces stiff competition from other computer service providers, such as Cisco Systems, and uses advertising and trademarks to influence its customers. 3Com’s advertising efforts are aimed primarily at computer network managers; for example, an advertising agency developed a two-page ad for 3Com titled “We Came. We Saw. We Routed.” Ads such as these are placed in publications most likely to be seen by the target audience. It would be less effective for 3Com to place ads in People or Time magazines, since few of their readers are computer network managers, than it would be to advertise in business publications. The importance of establishing and maintaining 3Com’s trademarks is indicated by the guidelines the firm’s legal experts issue to employees. The following is a small sample of these guidelines for over 40 company and product trademarks:Always Use a Trademark as an Adjective, Followed by the Appropriate Description(s).If not, the trademark could become generic…make sure that 3Com and the ® symbol(3Com®) precedes a trademark mention of the product or service.Monopolistic competition: the competitive market in a more realistic setting 158 Correct: The 3Com® NBX® business telephone has powerful call processingfeatures. Incorrect: NBX® has powerful call-processing features.Sources: /corpinfo/en_US/legal/trademark/tmn_list.html/Portfolio/Advertising/advertising.html(a) Define marketing and explain the importance of marketing to firms.(b) Explain how 3Com Corporation uses marketing to differentiate its products.Solving the ProblemStep 1: Review the chapter material. Since this refers to the material in “How Marketing Differentiates Products,” you may want to review this section of the textbook which begins on page 327.Step 2: Define marketing and explain the importance of marketing to firms. Marketing refers to all the activities necessary for a firm to sell a product to a consumer. To earn profits, monopolistically competitive firms must differentiate their products. These firms use two marketing tools to do this: brand management and advertising.Step 3: Explain how 3Com Corporation uses marketing to differentiate its products. 3Com Corporation uses brand management, including extensive use of trademarks, and advertising to differentiate its products. 3Com Corporation focuses its marketing strategies on its customers; such as computer network managers.Self-Test(Answers are provided at the end of the Self-Test.)Multiple-Choice Questions1Why does a monopolistically competitive firm have a downward-sloping demand curve?a Because the firm is considered to be a monopoly in its own market.b Because changing the price will affect the quantity sold.c Because the firm is close to a price taker, like a wheat farmer.d Because the level of output produced depends on the cost structure of the firm.2In which case is the firm’s demand curve the same as marginal revenue?a In the monopolistically competitive case.b In the perfectly competitive case.c In both the monopolistically competitive case and the perfectly competitive case.d In neither the monopolistically competitive case nor the perfectly competitive case.3Which of the following measures is conceptually the same as price?a Marginal revenue.b Total revenue.c Average revenue.d None of the above.159 Chapter104When a monopolistically competitive firm cuts price, good and bad things happen. Which of the following is considered a good thing?a The price effect.b The output effect.c The revenue effect.d All of the above are good things.5Refer to the table below. What is the average revenue associated with the sixth unit of output produced and sold?a$3.00b$2.00c$0.50d None of the above. There is insufficient information to answer the question.6Refer to the figure below. A downward move along the demand curve results in a gain and a loss of revenue. Which area represents the loss of revenue?a Area A.b Area B.c Both A and B represent revenue losses.d An area not shown.Monopolistic competition: the competitive market in a more realistic setting 1607If a firm has the ability to affect the price of the good or service it sells, what is the relationship between its marginal revenue curve and its demand curve?a The firm will have a marginal revenue curve that is above its demand curve.b The firm will have a marginal revenue curve that is below its demand curve.c The firm will have a marginal revenue curve that is the same as its demand curve.d The firm will have an upward-sloping marginal revenue curve and a downward-slopingdemand curve.8Which of the following types of firms use the marginal revenue equals marginal cost approach to maximise profits?a Perfectly competitive firms.b Monopolistically competitive firms.c Both perfectly competitive and monopolistically competitive firms.d Neither perfectly competitive nor monopolistically competitive firms.9Refer to the figure below. In order to maximise profit, what price should the firm charge?a$18b$15c$8d$410Refer to the figure below. Which firm is maximising profits?a The firm on the left.b The firm on the right.c Both firms.d Neither firm.161 Chapter1011Refer to the figure below. When total cost is subtracted from total revenue, which area remains?a Area A.b Area B.c Area A + B.d None of the above. That information cannot be obtained from this graph.Monopolistic competition: the competitive market in a more realistic setting 162 12Refer to the table below. What level of output should be produced in order to maximise profit?a 1 unit of output.b 5 units of output.c 6 units of output.d10 units of output.13How does the entry of new coffeehouses affect the profits of existing coffeehouses?a Entry will shift the market demand curve for coffee to the right.b Entry will shift the firm’s demand curve to the right.c Entry will make the firm’s demand curve more elastic.d Entry will in no way affect the profits of existing coffeehouses.14Refer to the figure below. Which graph depicts a situation in which firms might exit the industry?a The graph on the left.b The graph in the middle.c The graph on the right.d None of the above.15Refer to the figure below. Which graph best depicts the profit or loss situation for a monopolistically competitive firm in the long run?a The graph on the left.b The graph in the middle.c The graph on the right.d None of the above.16For a monopolistically competitive firm, is zero economic profit inevitable in the long run?a Yes. There is nothing the firm can do to avoid zero economic profit in the long run.b No. A firm could try to avoid losing its profit in the long run by producing a productidentical to those of competing firms.c No. A firm could try to avoid losing profits by reducing production costs and improvingits products.d No. A firm could simply offer goods that are cheaper to produce even if they have lessvalue than those offered by competing firms.17Refer to the graph below. Which equilibrium level of output indicates excess capacity?a Q1.b Q2.c Both Q1 and Q2.d Neither Q1 nor Q2.18What trade-offs do consumers face when buying a product from a monopolistically competitive firm?a Consumers pay a lower price but also have fewer choices.b Consumers pay a price greater than marginal cost but also have choices more suited totheir tastes.c Consumers pay a higher price but are happy knowing that the industry is highly efficient.d Consumers pay a price as low as the competitive price but have difficulty finding andbuying the product.19What is the term given to the actions of a firm intended to maintain the differentiation of a product over time?a Brand management.b Advertising.c Marketing.d Campaigning.20Refer to the figure below. Which of the following terms is missing in the box on the right?a Brand management.b Marketing.c Profitability.d Demand.Short Answer Questions1.Describe how Starbucks has used brand management to differentiate its products.2.What is the most important characteristic that perfectly competitive and monopolisticallycompetitive firms have in common?3.Why is it not possible for a monopolistically competitive firm to produce at minimum averagetotal cost in long run equilibrium?4.The overall strength of the economy has an important influence on the profits of firms. Althoughfirms cannot affect the economy’s performance, knowledge of how economy-wide changes affect the demand for their products can help firms respond to these changes. What product information would be most useful for firms to have?5.Some of Coca-Cola’s employees are required to visit restaurants and bars and order mixeddrinks. What motivation would Coca-Cola have to encourage their employees to “drink on the job?”True/False QuestionsT F 1. The marginal revenue curve lies below the demand curve for any firm that hasthe ability to affect the price of the product it sells.T F 2. Monopolistically competitive firms charge a price greater than marginal costin both the short run and the long run.T F 3. Unlike perfectly competitive firms, monopolistically competitive firms earnlong run profits.T F 4. When some firms exit a monopolistically competitive market, the demand curves of firms that remain become less elastic.T F 5. Among the factors that make a firm successful but are not under its control isthe ability to differentiate its product.T F 6. Brand management refers to all activities necessary for a firm to sell a productto a consumer.T F 7. Unlike perfectly competitive firms, monopolistically competitive firms haveexcess capacity.T F 8. Because a monopolistically competitive firm has a downward sloping demandcurve, marginal revenue will always be lower than price.T F 9. An important reason why Starbucks has been able to maintain control over theoperations of its coffeehouses is that they are all company-owned, notfranchises.T F 10. One motive for advertising is to make the demand for a product more elasticso that when price is lowered there will be a greater increase in quantitydemanded.Answers to the Self-TestMultiple-Choice QuestionsQuestion Answer Explanation1 b Because changing the price affects the quantity sold, a monopolisticallycompetitive firm will face a downward-sloping demand curve, rather than the horizontal demand curve faced by a competitive firm, like a wheat farmer. 2 bA perfectly competitive firm faces a horizontal demand curve and does not have to cut the price in order to sell a larger quantity. A monopolistically competitive firm, however, must cut the price to sell more, so its marginal revenue curve will slope downward and will be below its demand curve. 3 cPrice is revenue per unit, or average revenue. Average revenue is equal to total revenue divided by quantity. Because total revenue equals price multiplied by quantity, dividing by quantity leaves just price. Therefore, average revenue is always equal to price. This will be true for firms in any of the four market structures. 4 bWhen the firm cuts the price by $0.50, one good thing and one bad thing happen: The good thing: It sells one more café latte; we can call this the output effect. The bad thing: It receives $.050 less for each café latte that it could have sold at the higher price; we can call this the price effect. 5 aAverage revenue equals price, which is $6.00 when six units are sold. Or, average revenue equals total revenue divided by output, or $18.00/6 = $3.00. 6 aArea A shows the loss of revenue from a price cut = $.50 x 5 = $2.50. 7 bEvery firm that has the ability to affect the price of the good or service it sells will have a marginal revenue curve that is below its demand curve. Only firms in perfectly competitive markets, which can sell as many units as they want at the market price, have marginal revenue curves that are the same as their demand curves. 8 cAll firms use the same approach to maximise profits: Produce where marginal revenue is equal to marginal cost. 9 bMarginal cost equals marginal revenue when 900 units of output are produced and sold. Consumers are willing to pay $15 for 900 units. 1 cIn both cases, the output level is set where marginal revenue equals marginal cost. 11 aCorrect. Profit = (P – ATC) Q, or alternatively, Profit = TR – TC, where TR = P x Q, and TC = ATC x Q. 12 b At this level of output, marginal revenue of $1.50 equals marginal cost.13 c As new coffeehouses open, the firm’s demand curve will shift to the left. Thedemand curve will shift because the existing firms will sell fewer cups of coffeeat each price now that there are additional coffee coffeehouses in the area selling similar drinks. The demand curve will also become more elastic becauseconsumers in the area now have additional coffeehouses from which to buycoffee, so existing firms will lose more customers if they raise their prices.14 b Since price is less than average total cost, the firm is suffering losses. Firm losses will lead to the exit of some firms in the industry.15 b In the long run, a monopolistically competitive firm earns zero economic profit, or P = ATC.16 c Firms try to avoid losing profits by reducing the cost of producing their products,by improving their products, or by convincing consumers their products areindeed different from what competitors offer. To stay one step ahead of itscompetitors, a firm has to offer consumers goods or services that they perceiveto have greater value than those offered by competing firms.17 a The monopolistically competitive firm has excess capacity equal to thedifference between its profit-maximising level of output and the productivelyefficient level of output.18 bConsumers face a trade-off when buying the product of a monopolisticallycompetitive firm: They are paying a price that is greater than marginal cost andthe product is not being produced at minimum average cost, but they benefit from being able to purchase a product that is differentiated and more closelysuited to their tastes.19 a The actions of a firm intended to maintain the differentiation of a product over time are called brand management.20 c The factors under a firm’s control—the ability to differentiate its product and theability to produce it at lower cost—combine with the factors beyond its controlto determine the firm’s profitability.Short Answer Responses1. The textbook describe several brand management methods Starbucks uses to differentiate itsproducts. “Competitors have found it difficult to duplicate Starbucks’ European espresso bar atmosphere…Most importantly, Starbucks has continued to be very responsive to its customers’ preferences…” In addition, company-owned coffeehouses (rather than franchise businesses) enable Starbucks to have greater control of the products sold and how they are marketed. Despite the success it has enjoyed, low entry barriers will eventually enable other firms to copy much of what Starbucks has done. Starbucks must continue to use brand management techniques to postpone the time when its economic profits are eliminated.2. Low entry barriers are common to both market structures. This ensures that firms earn zeroeconomic profits in the long run.。
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ContentsChapter 3 Labor Productivity and Comparative Advantage: The Ricardian Model 2 Chapter 4 Specific Factors and Income Distribution 13 Chapter 5 Resources and Trade: The Heckscher-Ohlin Model 22 Chapter 6 The Standard Trade Model 31 Chapter 7 Economies of Scale, imperfect Competition, and International Trade 41 Chapter 8 International Factor Movements 50 Chapter 9 The Instruments of Trade Policy 60Chapter 3: Labor Productivity and Comparative Advantage - The Ricardian ModelMultiple Choice Questions1.Countries trade with each other because they are _______ and because of______.A. different, costsB. similar, scale economiesC. different, scale economiesD. similar, costsE.None of the above.2.Trade between two countries can benefit both countries ifA.each country exports that good in which it has a comparative advantage.B.each country enjoys superior terms of trade.C.each country has a more elastic demand for the imported goods.D.each country has a more elastic supply for the supplied goods.E.Both C and D.3.The Ricardian theory of comparative advantage states that a country has acomparative advantage in widgets ifA.output per worker of widgets is higher in that country.B.that country's exchange rate is low.C.wage rates in that country are high.D.the output per worker of widgets as compared to the output of some otherproduct is higher in that country.E.Both B and C.4.In order to know whether a country has a comparative advantage in theproduction of one particular product we need information on at least ____unitlabor requirementsA.oneB.twoC.threeD.fourE.five5. A country engaging in trade according to the principles of comparativeadvantage gains from trade because itA.is producing exports indirectly more efficiently than it could alternatively.B.is producing imports indirectly more efficiently than it coulddomestically.D.is producing imports indirectly using fewer labor units.E.None of the above.6.Given the following information:Unit Labor RequirementsCloth WidgetsHome 10 20Foreign 60 30A.Neither country has a comparative advantage.B.Home has a comparative advantage in cloth.C.Foreign has a comparative advantage in cloth.D.Home has a comparative advantage in widgets.E.Home has a comparative advantage in both products.7.If it is ascertained that Foreign uses prison-slave labor to produce its exports,then home shouldA.export cloth.B.export widgets.C.export both and import nothing.D.export and import nothing.E.All of the above.8.If the Home economy suffered a meltdown, and the Unit Labor Requirements ineach of the products quadrupled (that is, doubled to 30 for cloth and 60 forwidgets) then home shouldA.export cloth.B.export widgets.C.export both and import nothing.D.export and import nothing.E.All of the above.9.If wages were to double in Home, then Home should:A.export cloth.B.export widgets.C.export both and import nothing.D.export and import nothing.E.All of the above.10.If the world equilibrium price of widgets were 4 Cloths, thenA.both countries could benefit from trade with each other.B.neither country could benefit from trade with each other.C.each country will want to export the good in which it enjoys comparativeadvantage.D.neither country will want to export the good in which it enjoyscomparative advantage.E.both countries will want to specialize in cloth.11.Given the following information:Number of Units Produced by one Unit of LaborCloth WidgetsHome 10 20Foreign 60 30A.Neither country has a comparative advantage.B.Home has a comparative advantage in cloth.C.Foreign has a comparative advantage in cloth.D.Foreign has a comparative advantage in widgets.E.Home has a comparative advantage in both products.12.The opportunity cost of cloth in terms of widgets in Foreign is if it is ascertainedthat Foreign uses prison-slave labor to produce its exports, then home shouldA.export cloth.B.export widgets.C.export both and import nothing.D.export and import nothing.E.All of the above.13.If wages were to double in Home ,then Home shouldA.export cloth.B.export widgets.C.export both and import nothing.D.export and import nothing.E.All of the above.14.If the world equilibrium price of widgets were 4 Cloths, thenA.both countries could benefit from trade with each other.B.neither country could benefit from trade with each other.C.each country will want to export the good in which it enjoys comparativeadvantage.D.neither country will want to export the good in which it enjoyscomparative advantage.E.both countries will want to specialize in cloth.15.If the world equilibrium price of widgets were 40 cloths, thenA.both countries could benefit from trade with each other.B.neither country could benefit from trade with each other.C.each country will want to export the good in which it enjoys comparativeadvantage.D.neither country will want to export the good in which it enjoyscomparative advantage.E.both countries will want to specialize in cloth.16. In a two product two country world, international trade can lead to increases inA.consumer welfare only if output of both products is increased.B.output of both products and consumer welfare in both countries.C.total production of both products but not consumer welfare in bothcountriesD.consumer welfare in both countries but not total production of bothproducts.E.None of the above.17.As a result of trade, specialization in the Ricardian model tends to beplete with constant costs and with increasing costs.plete with constant costs and incomplete with increasing costs.C.incomplete with constant costs and complete with increasing costs.D.incomplete with constant costs and incomplete with increasing costs.E.None of the above.18. A nation engaging in trade according to the Ricardian model will find itsconsumption bundleA.inside its production possibilities frontier.B.on its production possibilities frontier.C.outside its production possibilities frontier.D.inside its trade-partner's production possibilities frontier.E.on its trade-partner's production possibilities frontier.19.In the Ricardian model, if a country's trade is restricted, this will cause all exceptwhich?A.Limit specialization and the division of labor.B.Reduce the volume of trade and the gains from tradeC.Cause nations to produce inside their production possibilities curvesD.May result in a country producing some of the product of its comparativedisadvantageE.None of the above.20.If a very small country trades with a very large country according to theRicardian model, thenA.the small country will suffer a decrease in economic welfare.B.the large country will suffer a decrease in economic welfare.C.the small country will enjoy gains from trade.E.None of the above.21.If the world terms of trade for a country are somewhere between the domesticcost ratio of H and that of F, thenA.country H but not country F will gain from trade.B.country H and country F will both gain from trade.C.neither country H nor F will gain from trade.D.only the country whose government subsidizes its exports will gain.E.None of the above.22.If the world terms of trade equal those of country F, thenA.country H but not country F will gain from trade.B.country H and country F will both gain from trade.C.neither country H nor F will gain from trade.D.only the country whose government subsidizes its exports will gain.E.None of the above.23. If the world terms of trade equal those of country ,F thenA.country H but not country F will gain from trade.B.country H and country F will both gain from trade.C.neither country H nor F will gain from trade.D.only the country whose government subsidizes its exports will gain.E.None of the above.24.If a production possibilities frontier is bowed out (concave to the origin), thenproduction occurs under conditions ofA.constant opportunity costs.B.increasing opportunity costs.C.decreasing opportunity costs.D.infinite opportunity costs.E.None of the above.25.If two countries have identical production possibility frontiers, then tradebetween them is not likely ifA.their supply curves are identical.B.their cost functions are identical.C.their demand conditions identical.D.their incomes are identical.E.None of the above.26.If two countries have identical production possibility frontiers, then tradebetween them is not likely ifA.their supply curves are identical.B.their cost functions are identical.D.their incomes are identical.E.None of the above.27.The earliest statement of the principle of comparative advantage is associatedwithA.David Hume.B.David Ricardo.C.Adam Smith.D.Eli Heckscher.E.Bertil Ohlin.28. If one country's wage level is very high relative to the other's (the relative wageexceeding the relative productivity ratios), then if they both use the samecurrencyA.neither country has a comparative advantage.B.only the low wage country has a comparative advantage.C.only the high wage country has a comparative advantage.D.consumers will still find trade worth while from their perspective.E. None of the above.29.If one country's wage level is very high relative to the other's (the relative wageexceeding the relative productivity ratios), thenA.it is not possible that producers in each will find export marketsprofitable.B.it is not possible that consumers in both countries will enhance theirrespective welfares through imports.C.it is not possible that both countries will find gains from trade.D.it is possible that both will enjoy the conventional gains from trade.E.None of the above.30.The Ricardian model is based on all of the following exceptA.only two nations and two products.B. no diminishing returns.bor is the only factor of production.D.product quality varies among nations.E.None of the above.31. Ricardo's original theory of comparative advantage seemed of limited real-world value because it was founded on thebor theory of value.B. capital theory of value.C. land theory of value.D. entrepreneur theory of value.E.None of the above.32.According to Ricardo, a country will have a comparative advantage in theproduct in which itsbor productivity is relatively low.bor productivity is relatively high.bor mobility is relatively low.bor mobility is relatively high.E.None of the above.33.In a two-country, two-product world, the statement "Germany enjoys acomparative advantage over France in autos relative to ships" is equivalent toA.France having a comparative advantage over Germany in ships.B.France having a comparative disadvantage compared to Germany inautos and ships.C.Germany having a comparative advantage over France in autos and ships.D.France having no comparative advantage over Germany.E.None of the above.34.Assume that labor is the only factor of production and that wages in the UnitedStates equal $20 per hour while wages in Japan are $10 per hour. Productioncosts would be lower in the United States as compared to Japan ifA.U.S. labor productivity equaled 40 units per hour and Japan's 15 units perhour.B.U.S. productivity equaled 30 units per hour whereas Japan's was 20.C.U.S. labor productivity equaled 20 and Japan's 30.D.U.S. labor productivity equaled 15 and Japan's 25 units per hour.E.None of the above.35.If the United States’ production possibility frontier was flatter to the widget axis,whereas Germany's was flatter to the butter axis, we know thatA.the United States has no comparative advantageB.Germany has a comparative advantage in butter.C.the U.S. has a comparative advantage in butter.D.Not enough information is given.E.None of the above.36.Suppose the United States' production possibility frontier was flatter to thewidget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark is sharply depreciated against the U.S. dollar. We now knowthatA.the United States has no comparative advantageB.Germany has a comparative advantage in butter.C.the United States has a comparative advantage in butter.D.Not enough information is given.E.None of the above.37.Suppose the United States' production possibility frontier was flatter to thewidget axis, whereas Germany's was flatter to the butter axis. We now learn that the German wage doubles, but U.S. wages do not change at all. We now knowthatA.the United States has no comparative advantage.B.Germany has a comparative advantage in butter.C.the United States has a comparative advantage in butter.D.Not enough information is given.E.None of the above.Essay Questions1.Many countries in Sub-Saharan Africa have very low labor productivities inmany sectors, in manufacturing and agriculture. They often despair of eventrying to attempt to build their industries unless it is done in an autarkic context,behind protectionist walls because they do not believe they can compete withmore productive industries abroad. Discuss this issue in the context of theRicardian model of comparative advantage.2.In 1975, wage levels in South Korea were roughly 5% of those in the UnitedStates. It is obvious that if the United States had allowed Korean goods to befreely imported into the United States at that time, this would have causeddevastation to the standard of living in the United States.,because no producer in this country could possibly compete with such low wages. Discuss this assertion in the context of the Ricardian model of comparative advantage.3.The evidence cited in the chapter using the examples of the East Asia NewIndustrializing Countries suggests that as international productivities converge,so do international wage levels. Why do you suppose this happened for the East Asian NICs? In light of your answer, what do you think is likely to happen tothe relative wages (relative to those in the United States) of China in the coming decade? Explain your reasoning.4.When we examine the 2 Good 2 Country version of the Ricardian model ofcomparative advantage, we note that comparative advantage is totallydetermined by physical productivity ratios. Changes in wage rates in eithercountry cannot affect these physically determined comparative advantages, andhence cannot affect, which product will be exported by which country. However, when more than 2 goods are added to the model (still with 2 countries), changesin wage rates in one or the other country can in fact determine which good orgoods each of the countries will export. How can you explain this anomaly?5.An examination of the Ricardian model of comparative advantage yields theclear result that trade is (potentially) beneficial for each of the two tradingpartners since it allows for an expanded consumption choice for each. However, for the world as a whole the expansion of production of one product mustinvolve a decrease in the availability of the other, so that it is not clear that tradeis better for the world as a whole as compared to an initial situation of non-trade(but efficient production in each country). Are there in fact gains from trade forthe world as a whole? Explain.Quantitative/Graphing Problems1. Given the following information:Unit Labor RequirementsCloth WidgetsHome 100 200Foreign 60 30What is the opportunity cost of Cloth in terms of Widgets in Foreign?2. Given the following information:Unit Labor RequirementsCloth WidgetsHome 100 200Foreign 60 30If these two countries trade these two goods in the context of the Ricardianmodel of comparative advantage, then what is the lower limit of the worldequilibrium price of widgets?3. Given the following information:Unit Labor RequirementsCloth WidgetsHome 100 200Foreign 60 30If these two countries trade these two goods with each other in according to the Ricardian model of comparative advantage, what is the lower limit for the price of cloth?4. Given the following information:Units Produced by One Worker/HourCloth WidgetsHome 100 200Foreign 60 30What is the opportunity cost of cloth in terms of Wwdgets in Foreign?5. Given the following information:Units Produced by One Worker/HourCloth WidgetsHome 100 200Foreign 60 30If these two countries trade these two goods with each other in the following the Ricardian model of comparative advantage, then what is the lower limit for the world equilibrium price of cloth?1. Home has 1200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is2.a. Graph Home's production possibility frontier.b. What is the opportunity cost of apples in terms of bananas?c. In the absence of trade, what would the price of apples in terms of bananas be? Why?2. Home is as described in problem 1. There is now also another country, Foreign, with a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1.a. Graph Foreign's production possibility frontier.b. Construct the world relative supply curve.3. Now suppose world relative demand takes the following form: Demand for apples / demand for bananas = price of bananas / price of applesa. Graph the relative demand curve along with the relative supply curve.b. What is the equilibrium relative price of apples?c. Describe the pattern of trade.d. Show that both Home and Foreign gain from trade.4. Suppose that instead of 1200 workers, Home had 2400. Find the equilibrium relative price. What can you say about the efficiency of world production and the division of the gains from trade between Home and Foreign in this case?5. Suppose that Home has 2400 workers, but they are only half as productive in both industries as we have been assuming. Construct the world relative supply curve and determine the equilibrium relative price. How do the gains from trade compare with those in the case described in problem 4?6. “ Korean workers earn only $2.50 an hour; if we allow Korea to export as much as it likes to the United States, our workers will be forced down to the same level. You can’t import a $5 shirt without importing the $2.50 wage that goes with it.” Discuss.7. 请对下列观点加以评价：（1）只有当一个国家的生产率达到足以在国际竞争中立足的水平时，它才能从自由贸易中获益；（2）如果来自外国的竞争是建立在低工资的基础上，那么这种竞争是不公平的，而且会损害其他参与竞争的国家；（3）如果一个国家的工人比其他国家工人的工资低，那么贸易就会使这个国家受到剥削并使福利恶化。
《国际经济学(英文版)》选择题汇总版(附答案)精选全文
精选全文完整版（可编辑修改）《国际经济学》选择题汇总版（附答案）Ch1-Ch31.The United States is less dependent on trade than most other countries becauseA) the United States is a relatively large country with diverse resources.B) the United States is a “Superpower.”C)the military power of the United States makes it less dependent on anything.D) the United States invests in many other countries.E) many countries invest in the United States.2. Because the Constitution forbids restraints on interstate trade,A) the U.S. may not impose tariffs on imports from NAFTA countries.B) the U.S. may not affect the international value of the $ U.S.C) the U.S. may not put restraints on foreign investments in California if it involves a financial intermediary in New York State.D) the U.S. may not impose export duties.E) the U.S. may not disrupt commerce between Florida and Hawaii.3. International economics can be divided into two broad sub-fieldsA) macro and micro.B) developed and less developed.C) monetary and barter.D) international trade and international money.E) static and dynamic.4. International monetary analysis focuses onA) the real side of the international economy.B) the international trade side of the international economy.C) the international investment side of the international economy.D) the issues of international cooperation between Central Banks.E) the monetary side of the international economy, such as currency exchange.5. The gravity model offers a logical explanation for the fact thatA)trade between Asia and the U.S. has grown faster than NAFTA trade.B) trade in services has grown faster than trade in goods.C) trade in manufactures has grown faster than in agricultural products.D) Intra-European Union trade exceeds international trade by the European Union.E) the U.S. trades more with Western Europe than it does with Canada.6. The gravity model explains whyA)trade between Sweden and Germany exceeds that between Sweden and Spain.B)countries with oil reserves tend to export oil.C)capital rich countries export capital intensive products.D) intra-industry trade is relatively more important than other forms of trade between neighboring countries.E) European countries rely most often on natural resources.7. Why does the gravity model work?A) Large economies became large because they were engaged in international trade.B) Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment.C) Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country.D) Large economies tend to have large incomes and tend to spend more on imports.E) Large economies tend to avoid trading with small economies.8. We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries.A) This is explained by the gravity model, since these are all large countries.B) This is explained by the gravity model, since these are all small countries.C) This fails to be consistent with the gravity model, since these are small countries.D)This fails to be consistent with the gravity model, since these are large countries.E)This is explained by the gravity model, since they do not share borders.9. In the present, most of the exports from China areA) manufactured goods.B) services.C)primary products including agricultural.D) technology intensive products.E) overpriced by world market standards.10. A country engaging in trade according to the principles of comparative advantage gains from trade because itA) is producing exports indirectly more efficiently than it could alternatively.B) is producing imports indirectly more efficiently than it could domestically.C) is producing exports using fewer labor units.D) is producing imports indirectly using fewer labor units.E) is producing exports while outsourcing services.11. The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result toA) differences in technology.B) differences in preferences.C)differences in labor productivity.D) differences in resources.E) gravity relationships among countries.12. A nation engaging in trade according to the Ricardian model will find its consumption bundleA) inside its production possibilities frontier.B)on its production possibilities frontier.C)outside its production possibilities frontier.D) inside its trade-partner's production possibilities frontier.E)on its trade-partner's production possibilities frontier.13. Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan ifA) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour.B) U.S. labor productivity equaled 30 units per hour and Japan's 20 units per hour.C) U.S. labor productivity equaled 20 units per hour and Japan's 30 units per hour.D) U.S. labor productivity equaled 15 units per hour and Japan's 25 units per hour.E) U.S. labor productivity equaled 15 units per hour and Japan's 40 units per hour.14. In a two-country, two-product world, the statement “Germany enjoys a comparative advantage over France in autos relative to ships”is equivalent toA) France having a comparative advantage over Germany in ships.B) France having a comparative disadvantage compared to Germany in autos and ships.C) Germany having a comparative advantage over France in autos and ships.D) France having no comparative advantage over Germany.E) France should produce autos.15. If the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis, we know thatA) the United States has no comparative advantageB) Germany has a comparative advantage in butter.C) the U.S. has a comparative advantage in butter.D) Germany has comparative advantages in both products.E) the U.S. has a comparative disadvantage in widgets.Ch4-Ch51.The Ricardian model of international trade demonstrates that trade can be mutually beneficial. Why, then, do governments restrict imports of some goods?A)Trade can have substantial effects on a country's distribution of income.B) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial.C) Import restrictions are the result of trade wars between hostile countries.D) Imports are only restricted when foreign-made goods do not meet domestic standards of quality.E) Restrictions on imports are intended to benefit domestic consumers.2. Japan's trade policies with regard to rice reflect the fact thatA) japanese rice farmers have significant political power.B) Japan has a comparative advantage in rice production and therefore exports most of its rice crop.C) there would be no gains from trade available to Japan if it engaged in free trade in rice.D) there are gains from trade that Japan captures by engaging in free trade in rice.E) Japan imports most of the rice consumed in the country.3. In the specific factors model, which of the following is treated as a specific factor?A)LaborB) LandC) ClothD) FoodE) Technology4. The specific factors model assumes that there are ________ goods and ________ factor(s) of production.A) two; threeB) two; twoC) two; oneD) three; twoE) four; three5. The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to________ and it ________ as more cloth is produced.A) -MPLF/MPLC; becomes steeperB) -MPLF/MPLC; becomes flatterC) -MPLF/MPLC; is constantD) -MPLC/MPLF; becomes steeperE) -MPLC/MPLF; is constant6. Under perfect competition, the equilibrium price of labor used to produce cloth will be equal toA)the slope of the production possibility frontier.B) the average product of labor in the production of cloth times the price of cloth.C) the ratio of the marginal product of labor in the production of cloth to the marginal product of labor in the production of food times the ratio of the price of cloth. to the price of food.D) the marginal product of labor in the production of cloth times the price of cloth.E) the price of cloth divided by the marginal product of labor in the production of cloth.7. In the specific factors model, which of the following will increase the quantity of labor used in cloth production?A)an increase in the price of cloth relative to that of foodB) an increase in the price of food relative to that of clothC) a decrease in the price of laborD) an equal percentage decrease in the price of food and clothE) an equal percentage increase in the price of food and cloth8. A country that does not engage in trade can benefit from trade only ifA)it has an absolute advantage in at least one good.B) it employs a unique technology.C) pre-trade and free-trade relative prices are not identical.D) its wage rate is below the world average.E) pre-trade and free-trade relative prices are identical.9. In the specific factors model, the effects of trade on welfare are ________ for mobile factors, ________ for fixed factors used to produce the exported good, and ________ for fixed factors used to produce the imported good.A)ambiguous; positive; negativeB) ambiguous; negative; positiveC) positive; ambiguous; ambiguousD) negative; ambiguous; ambiguousE) positive; positive; positive10.The effect of trade on specialized employees of import-competing industries will be ________ jobs and ________ pay because they are relatively ________.A)fewer; lower; mobileB) fewer; lower; immobileC) more; lower; immobileD) more; higher; mobileE) more; higher; immobile11. There is a bias in the political process against free trade becauseA)there is a high correlation between the volume of imports and the unemployment rate.B) the gains from free trade cannot be measured.C) those who gain from free trade can't compensate those who lose.D) foreign governments make large donations to U.S. political campaigns.E) those who lose from free trade are better organized than those who gain.12.In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ inA)tastes and preferences.B) military capabilities.C) the size of their economies.D) relative abundance of factors of production.E) labor productivities.13. If a country produces good Y (measured on the vertical axis) and good X (measured on the horizontal axis), then the absolute value of the slope of its production possibility frontier is equal toA)the opportunity cost of good X.B) the price of good X divided by the price of good Y.C) the price of good X divided by the price of good Y.D) the opportunity cost of good Y.E) the cost of capital (assuming that good Y is capital intensive) divided by the cost of labor.14. In the 2-factor, 2 good Heckscher-Ohlin model, trade will ________ the owners of a country's ________ factor and will ________ the good that uses that factor intensively.A)benefit; abundant; exportB)harm; abundant; importC) benefit; scarce; exportD) benefit; scarce; importE) harm; scarce; export15. The assumption of diminishing returns in the Heckscher-Ohlin model means that, unlike in the Ricardian model, it is likely thatA) countries will consume outside their production possibility frontier.B) countries will benefit from free international trade.C) countries will not be fully specialized in one product.D) comparative advantage will not determine the direction of trade.E) global production will decrease under trade.16.If Japan is relatively capital rich and the United States is relatively land rich, and if food is relatively land intensive then trade between these two, formerly autarkic countries will result inA)an increase in the relative price of food in the U.S.B) an increase in the relative price of food in Japan.C) a global increase in the relative price of food.D) a decrease in the relative price of food in both countries.E) an increase in the relative price of food in both countries.17. Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade beginsA) rent will be unchanged but wages will rise in H.B) wages and rents should rise in H.C) wages and rents should fall in H.D) wages should fall and rents should rise in H.E) wages should rise and rents should fall in H.18.The Leontieff ParadoxA) failed to support the validity of the Heckscher-Ohlin model.B) supported the validity of the Ricardian theory of comparative advantage.C) supported the validity of the Heckscher-Ohlin model.D) failed to support the validity of the Ricardian theory.E) proved that the U.S. economy is different from all others.19. Which of the following is an assertion of the Heckscher-Ohlin model?A) Factor price equalization will occur only if there is costless mobility of all factors across borders.B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.C) In the long-run, labor is mobile and capital is not.D) The wage-rental ratio determines the capital-labor ratio in a country's industries.E) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.20. Which of the following is an assertion of the Heckscher-Ohlin model?A) An increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good.B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.C) In the long-run, labor is mobile and capital is not.D) Factor price equalization will occur only if there is costless mobility of all factors across borders.E) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.Ch6-Ch101.If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace, thenA) the terms of trade of cloth exporters will improve.B) all countries would be better off.C) the terms of trade of food exporters will improve.D) the terms of trade of all countries will improve.E) the terms of trade of cloth exporters will worsen.2.If the ratio of price of cloth (PC) divided by the price of food (PF) increases in the international marketplace, thenA) world relative quantity of cloth supplied will increase.B) world relative quantity of cloth supplied and demanded will increase.C) world relative quantity of cloth supplied and demanded will decrease.D) world relative quantity of cloth demanded will decrease.E) world relative quantity of food will increase.3.If the U.S. (a large country) imposes a tariff on its imported good, this will tend toA) have no effect on terms of trade.B) improve the terms of trade of the United States.C) improve the terms of trade of all countries.D) because a deterioration of U.S. terms of trade.E) raise the world price of the good imported by the United States.4.If Slovenia were a large country in world trade, then if it instituted a large set of subsidies for its exports, this mustA) decrease its marginal propensity to consume.B) have no effect on its terms of trade.C) improve its terms of trade.D) harm its terms of trade.E) harm world terms of trade.5.Internal economies of scale arise when the cost per unitA) 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.6. External economies of scale will ________ average cost when output is ________ by________.A) reduce; increased; the industryB) reduce; increased; a firmC) increase; increased; a firmD) increase; increased; the industryE) reduce; reduce; the industry7. If some industries exhibit internal increasing returns to scale in each country, we should not expect to seeA) perfect competition in these industries.B) intra-industry trade between countries.C) inter-industry trade between countries.D) high levels of specialization in both countries.E) increased productivity in both countries.8. A learning curve relates ________ to ________ and is a case of ________ returns.A) unit cost; cumulative production; dynamic decreasing returnsB) output per time period; long-run marginal cost; dynamic increasing returnsC) unit cost; cumulative production; dynamic increasing returnsD) output per time period; long-run marginal cost; dynamic decreasing returnsE) labor productivity; education; increasing marginal returns9.Patterns of interregional trade are primarily determined by ________ rather than ________ because factors of production are generally ________.A) external economies; natural resources; mobileB) internal economies; external economies; mobileC) external economies; population; immobileD) internal economies; population; immobileE) population; external economies; immobile10. Monopolistic competition is associated withA) product differentiation.B) price-taking behavior.C) explicit consideration at the firm level of the strategic impact of other firms' pricing decisions.D) high profit margins in the long run.E) increasing returns to scale.11. A firm in long-run equilibrium under monopolistic competition will earnA) positive monopoly profits because each sells a differentiated product.B) zero economic profits because of free entryC) positive oligopoly profits because each firm sells a differentiated product.D) negative economic profits because it has economies of scale.E) positive economic profit if it engages in international trade.12. The most common form of price discrimination in international trade isA) dumping.B) non-tariff barriers.C) Voluntary Export Restraints.D) preferential trade arrangements.E) product boycotts.13.Consider the following two cases. In the first, a U.S. firm purchases 18% of a foreign firm. In the second, a U.S. firm builds a new production facility in a foreign country. Both are________, with the first referred to as ________ and the second as ________.A) foreign direct investment (FDI) outflows; brownfield; greenfieldB) foreign direct investment (FDI) inflows; greenfield; brownfieldC) foreign direct investment (FDI) outflows; greenfield; brownfieldD) foreign direct investment (FDI) inflows; brownfield; greenfieldE) foreign direct investment (FDI); inflows; outflows14. Specific tariffs areA) import taxes stated in specific legal statutes.B) import taxes calculated as a fixed charge for each unit of imported goods.C) import taxes calculated as a fraction of the value of the imported goods.D) the same as import quotas.E) import taxes calculated based solely on the origin country.15. A problem encountered when implementing an "infant industry" tariff is thatA) domestic consumers will purchase the foreign good regardless of the tariff.B) the industry may never "mature."C) most industries require tariff protection when they are mature.D) the tariff may hurt the industry's domestic sales.E) the tariffs fail to protect the domestic producers.16. In the country levying the tariff, the tariff willA) increase both consumer and producer surplus.B) decrease both the consumer and producer surplus.C) decrease consumer surplus and increase producer surplus.D) increase consumer surplus and decrease producer surplus.E) decrease consumer surplus but leave producers surplus unchanged.17. If the tariff on computers is not changed, but domestic computer producers shift from domestically produced semiconductors to imported components, then the effective rate of protection in the computer industry willA) increase.B) decreaseC) remain the same.D) depend on whether computers are PCs or "Supercomputers."E) no longer apply.18. When a government allows raw materials and other intermediate products to enter a country duty free, this generally results in a(an)A) effective tariff rate less than the nominal tariff rate.B) nominal tariff rate less than the effective tariff rate.C) rise in both nominal and effective tariff rates.D) fall in both nominal and effective tariff rates.E) rise in only the effective tariff rate.19. Should the home country be "large" relative to its trade partners, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of theA) revenue effect plus redistribution effect.B) protective effect plus revenue effect.C) consumption effect plus redistribution effect.D) production distortion effect plus consumption distortion effect.E) terms of trade gain.20. The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and removed,A) government tariff revenue will decrease, and therefore national economic welfare will decrease.B) government tariff revenue will decrease, and therefore national economic welfare will increase.C) deadweight losses for producers and consumers will decrease, hence increasing national economic welfare.D) deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare.E) government tariff revenue will increase, hence increasing national economic welfare.21. Which organization determines procedures for the settlement of international trade disputes?A) World BankB) World Trade OrganizationC) International Monetary OrganizationD) International Bank for Reconstruction and DevelopmentE) The League of Nations22. Today U.S. protectionism is concentrated inA) high-tech industries.B) labor-intensive industries.C) industries in which Japan has a comparative advantage.D) computer intensive industries.E) capital-intensive industries.23. The quantitative importance of U.S. protection of the domestic clothing industry is best explained by the fact thatA) this industry is an important employer of highly skilled labor.B) this industry is an important employer of low skilled labor.C) most of the exporters of clothing into the U.S. are poor countries.D) this industry is a politically well organized sector in the U.S.E) the technology involved is very advanced.24. The optimum tariff is most likely to apply toA) a small tariff imposed by a small country.B) a small tariff imposed by a large country.C) a large tariff imposed by a small country.D) a large tariff imposed by a large country.E) an ad valorem tariff on a small country.25. The median voter modelA) works well in the area of trade policy.B) is not intuitively reasonable.C) tends to result in biased tariff rates.D) does not work well in the area of trade policy.E) is not widely practiced in the United States.By：某某。
Chapter9 Monopolistic Competition 经济学英语题库(可编辑)
Chapter9 Monopolistic Competition 经济学英语题库（可编辑）(文档可以直接使用，也可根据实际需要修改使用,可编辑推荐下载）Chapter 9 Monopolistic CompetitionMultiple Choice1. Because monopolistically competitive firms produce differentiated products, each firm(d)a.faces a demand curve that is horizontal.b.faces a demand curve that is vertical.c.has no control over product price.d.has some control over product price.2. Which of the following conditions distinguishes monopolistic competition from perfect competition? (d)a. Number of sellers.b. Freedom of entry and exit.c. Small size firms.d. Differentiation of product.3. If existing fast-food firms realize sizable economic profits in the short run, the demand curves of existing firms will (a)a.decrease and become more elastic.b.decrease and become less elastic.c.increase and become more elastic.d.increase and become less elastic.4. When a monopolistically competitive firm raises its price, (b)a.quantity demanded falls to zero.b.quantity demanded declines, but not to zero.c.the market supply curve shifts outward.d.quantity demanded remains constant.5. There are several reasons why demand curves may become more elastic. Among them are (b)a. the market becomes more monopolistic and cross elasticities approach zero.b. the goods become less differentiated and more firms enter the industry.c. consumers have fewer substitutes and firms drop out of the industry.d. industry demand increases and consumers increase spending.6. Which of the following is a characteristic of oligopoly or monopolistic competition, but not perfect competition? (a)a. Advertising and sales promotion.b. Profit maximization according to the MR = MC rule.c. Firms being price takers rather than price makers.d. Horizontal demand and marginal revenue curves.7. Product differentiation allows the firm to (b)a. raise price and lower quantity demanded.b. raise price without suffering a substantial loss of sales.c. shift the market demand curve to the left.d. decrease barriers to entry.8. The maximum total short run economic profit, or minimum loss, for the monopolistically competitive firm in this figure is ©a. zero.b. a profit of $575.00.c. a profit of $2,000.00.d. a loss of $375.00.9. Cecilia’s Café is a monopolistic competitor. If Cecilia’s is currently producing at the output level where her average total cost is minimized and the café is earning economic profits, then in the long run output will (a)a. decrease and average total cost will increase.b. decrease and average total cost will decrease.c. remain unchanged as Cecilia’s is doi ng the best it can.d. increase and average total costs will decrease.10. In the long run, freedom of entry into a market forces a (b) to charge a price equal to average total cost, but average total cost exceeds its minimum levela.perfectly competitive firmb.monopolistically competitive firmc.oligopolistic firmd.pure monopoly11. Which of the following best describes the idea of excess capacity in monopolistic competition? (b)a. Firms produce more output than is socially desirable.b. The output produced by a typical firm is less than what would occur at theminimum point on its ATC curve.c. due to product differentiation, firms choose output levels where P>ATC.d. firms keep some surplus output on hand in case there is a shift in the demandfor their product.12. Which of the following individuals quoted below is least likely to argue that excess capacity in monopolistically competitive industries is a waste of resources? (b)a. “An automobile is transportation, nothing else.”b. “Tom atoes or no tomatoes. The choice of toppings on a burger can beimportant to a consumer these days when individualism is increasingly important to people.”c. “Gasoline is gasoline no matter what the brand name.”d. “I take the airline that will get me from A to B at the lowest price.”13. The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because (b)a. there are too few firms to reach an efficient level of production.b. firms do not operate at the output that minimizes average costs.c. advertising is not used extensively enough to yield an efficient differentiationof the products.d. consumers do not have enough choice among the product varieties available.14. Monopolistic competition is considered by some to be inefficient because (a)a. price exceeds marginal cost.b. output exceeds capacity output.c. long run profits are positive.d. of all of the above.15. Perhaps it’s not a problem at all, but if “too much choice” is a problem for consumers, it would occur in which market structure(s)? ( c )a. Perfect competition.b. Monopoly.c. Monopolistic competition.d. Perfect competition and monopolistic competition.16. Which of the following might be an effect of advertising? (d)a. Increased product differentiation.b. Increased total costs of production.c. Increased demand for the product.d. All of the above.17. In the long run under monopolistic competition, when firms advertise, (a)a. they will still earn zero economic profit.b. they can earn positive economic profit by increasing market share.c. the market price must fall.d. the market price must rise.18. Advertising (d)a. provides information about products, including prices and seller locations.b. has been proven to increase competition and reduce prices compared tomarkets without advertising.c. signals quality to consumers, since firms spend so much money on ads.d. does all of the above.29. Critics of advertising argue that (a)a. advertising wastes resources because it creates an image without necessarilyimproving product quality.b. advertising lowers barriers to entry into an industry because new firms canmore easily establish themselves as competitors.c. advertising increases competition by providing information about prices.d. advertising encourages monopolization of markets by raising entry barriers toohigh.30. Many airlines promise “frequent flyer” miles to passengers who fly their air lines regularly. This is an example of a firm attempting to create (d)a. price discrimination.b. a predatory pricing scheme.c. discounting below marginal costs.d. brand loyalty.31. One of the reasons that Kodak and Fuji films advertise so much is that (c )a. each hopes to create a natural monopoly.b. they are in a perfectly competitive industry where advertising is the differencebetween economic and normal profits.c. they want to develop brand loyalty.d. they want to increase price elasticities of demand.32. If some coffee drinkers continue to buy Maxwell House coffee even when Folger’s coffee is on sale and cheaper, it may be a result of ( c )a. irrational consumer behavior.b. a high cross elasticity between the two goods.c.brand loyalty.d.Maxwell House being a monopoly.Short Answer And Essay1. How do the characteristics of perfect competition and monopolistic competition differ?Answer:In monopolistic competition, the products sold are similar but differentiated, thereby enabling firms to compete on the basis of product development and marketing to further differentiate their products. In perfect competition the products are identical, thereby eliminating the opportunity for firms to compete by differentiating their product.2. Why is collusion about the price and amount of output impossible in monopolistic competition?Answer:The smaller the number of firms, the more likely collusion is to occur. Monopolistic competition has too many firms for collusion to be successful.3. What do demand and marginal revenue curves look like in monopolistic competition? How do they compare to the demand and marginal revenue curves in perfect competition and monopoly?Answer:In monopolistic competition, the product is differentiated. This fact gives each firm some con trol over price, so each firm’s demand curve is downward sloping. Because there are many close substitutes for these firms’ goods, demand is elastic. These firms must lower their price to sell more; therefore the marginal revenue curve is beneath the demand curve. In perfect competition, the product is homogeneous, which makes firms price-takers, able to sell as much as they wish at the market price. Therefore, marginal revenue equals price, and the marginal revenue curve and the demand curve are the same and are horizontal.In monopoly, there is only one firm. The firm faces the market demand, which is steep, because there are no close substitutes for the good. The firm must lower its price to sell more, so for a single-price monopoly, the marginal revenue curve is beneath the demand curve.4. What is the Herfindahl-Hirschman Index and what does it measure?Answer:The Herfindahl-Hirschman Index, or HHI, is an index used to measure the extent to which a market is dominated by a small number of firms. The HHI equals the sum of the squared percentage market shares of each of the 50 largest firms in the market. A monopoly will have a HHI of 10,000 whereas perfect competition will have a small HHI.5. “A firm in monopolisti c competition maximizes its profit by producing where its price is equal to its marginal cost.” Is the previous statement correct or incorrect? Answer:The statement is incorrect. A firm in monopolistic competition maximizes its profit by producing where its marginal revenue equals its marginal cost. Because the marginal revenue is less than the price for a firm in monopolistic competition, it definitely is not the case that the firm produces where its price equals its marginal cost!6. How does a firm in monopolistic competition determine its price and quantity? What type of profit can it earn in the short run and the long run?Answer:The firm produces where its marginal cost equals its marginal revenue. Then the price is determined from the demand curve and is the highest price at which people will buy the quantity produced. The firm can earn an economic or a normal profit in the short run. (It could also suffer an economic loss in the short run.) In the long run, the firm cannot earn an economic profit; it can only earn a normal profit.7. What type of profit can a firm in monopolistic competition earn in the long run? Explain your answer.Answer:In the long run, a firm in monopolistic competition can earn only a normal profit. It cannot earn an economic profit because there are no barriers to entry. So if a firm inmonopolistic competition is earning an economic profit, in the long run new firms enter the market, pro duce a similar product, and decrease the demand for the initial firm’s product. Entry continues until the firms earn only a normal profit.8. Why are firms in monopolistic competition unable to earn an economic profit in the long run?Answer:While firms in monopolistic competition do not produce an identical product, such as perfectly competitive firms, they face the same problem other competitive firms face: freedom of entry. When firms in monopolistic competition are earning an economic profit, other firms will enter the market. Entry decreases the demand for the products of the existing firms and thereby decreases their economic profit. Firms will continue to enter the market until the economic profit equals zero.9. Why does a monopolistic firm earn a normal profit in the long run?Answer:Entry into monopolistically competitive markets is easy because there are no barriers to entry. So when firms in monopolistic competition have an economic profit, other firms are attracted to enter the industry, thereby decreasing profits for everyone. Entry continues as long as there is an economic profit so, in the long run when all entry is completed, the firms earn only a normal profit.10. What is excess capacity? What industry has excess capacity in the long run: perfect competition or monopolistic competition?Answer:The capacity output is the level that minimizes the average total cost. Excess capacity occurs if the firm produces less than the amount of output that minimizes average total cost. In this case, the firm could boost its output and lower its average total cost. Firms in monopolistic competition have excess capacity. Firms in perfect competition produce at the minimum of the average total cost. They produce at the capacity output and so do not have excess capacity.Numeric And GraphingFirm Market share (percent)A 12B 10C 5D 31. The above table shows the percent of market sales held by the four largest firms in an industry.a. Calculate this industry’s four-firm concentration ratio.b. Is this industry competitive?c. What market type does it most likely represent?Answer:a. The four-firm concentration rate is 30 percent.b. Because the four-firm concentration ratio is relatively low, the industry is competitive.c. The industry is most likely monopolistic competition.2. Suppose there are ten firms that occupy the Odell, Oregon cherry pie market. The market share of each firm is listed in the above table.a. What is the four-firm concentration ratio in this market?b. What is the Herfindahl-Hirschman Index for this market?c. If Firm H and Firm A merge, what is the new Herfindahl-Hirschman Index for this market?d. A severe winter causes every firm except A, B, and E to close. With only these three firms operating, Firm A’s market share is 71 percent, Firm B’s market share is 23 percent, and Firm C’s market share is 6 percent. What is the Herfindahl-Hirschman Index for this market now?Answer:a. The four-firm concentration rate is 74 percent.b. The Herfindahl-Hirschman Index is 1,782.c. Once firms H and A merge, the new Herfindahl-Hirschman Index is 2,038.d. The Herfindahl-Hirschman Index is now 5,606.Price (dollars per unit) Quantitydemanded(units)Quantityproduced(units)Average totalcost(dollars)Marginal cost(dollars)26 0 0 --- ---24 1 1 18.00 8.0022 2 2 12.00 6.0020 3 3 10.66 8.0018 4 4 10.50 10.0016 5 5 11.20 14.0014 6 6 12.66 20.0012 7 7 15.14 30.0010 8 8 23.25 80.003. The demand and cost schedules for a firm in monopolistic competition are in the above tables. What is the profit-maximizing level of output and price? What amount of profit is the firm earning? Is this firm in a short-run or long-run equilibrium? Why?Answer:To determine the quantity produced, the firm will set marginal cost equal to marginal revenue. Therefore it is necessary to determine the marginal revenue. The marginal revenue going from 3 to 4 units is $12 and the marginal revenue going from 4 to 5 units is $8. Thus the marginal revenue at 4 units is $10, which equals the marginal cost. Therefore the firm produces 4 units. The demand schedule shows that for 4 units, the price will be $16 per unit. The firm’s economic profit per unit equals the price, $16, minus its average total cost, $10.50, or an economic profit of $5.50 per unit. The firm produces 4 units, so its total economic profit is $22.00. The firm is in a short-run equilibrium because it is able to earn an economic profit. In the long run, entry will decrease its demand so that it no longer can earn an economic profit.4. The above figure represents Tony’s Pizza Parlor, a firm in monopolistic competition.a. What quantity will be produced?b. What price will be charged?c. What is Tony’s total cost?d. What is Tony’s total revenue?e. What is Tony’s economic profit or loss?f. Is this a long-run equilibrium? Why or why not?Answer:a. 40 pizzas per dayb. $12.00 per pizzac. $320d. $480e. Tony has an economic profit of $160.f. This is not a long-run equilibrium because Tony is earning an economic profit. In the long run, new firms will enter and Tony’s economic profit will be eliminated.5. Draw an example of a firm in monopolistic competition that is earning an economic profit. Be sure to label all the curves. Indicate the area that equals the firm’s economic profi t.Answer:The completed figure is above.6. The above figure represents a restaurant operating in monopolistic competition.a. What is the profit-maximizing level of output?b. What price will the firm charge?c. What is the firm’s profit (or loss)?d. Is this a long-run equilibrium? Why or why not?e. Is this firm producing its capacity output?Answer:a. The quantity is 20 meals a day.b. The price is $12 per meal.c. The firm is making zero economic profit, that is, the firm is earning a normal profit.d. This is a long-run equilibrium because the firm is making zero economic profits so there is no incentive for either entry or exit.e. No, the firm is not producing its capacity output. It is producing less than the capacity. The capacity, where the average total cost is at is minimum, is 50 meals a day. Hence the firm has excess capacity.7. How do product development and marketing affect a firm in monopolistic competition?Answer:Product development and marketing have two effects on a firm. First, because these activities are costly, they increase the firm’s costs and shift its costs curves upward. Second, they can increase the demand f or the firm’s products.8. Why would a firm in a monopolistically competitive industry ever advertise? Answer:Similar to virtually every other business decision, advertising carries with it benefits and costs. While advertising causes the fixed costs to increase, and thereby shifts the average total cost curve upward, advertising also might increase the demand for the company’s product by temporarily making people believe that the product is better than some other firm’s pro duct. Firms in monopolistic competition frequently advertise extensively in order to differentiate their product from those of their competitors and thereby increase the demand for their particular version of the product.9. Why are selling costs high in monopolistic competition?Answer:In monopolistic competition, there are a large number of small firms producing differentiated products. Each firm’s output is a substitute for other firms’ output; therefore demand for any firm’s product is very elastic. If firms can further differenti ate their product in the eyes of the consumer, they might be able to both increase demand and decrease demand elasticity, at least temporarily. In this case, the firm could then charge a higher price and, temporarily at least, earn an economic profit. This differentiation occurs through innovation, product development and marketing, which contribute to selling costs.10. Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.Answer:The additional selling costs from product differentiation and marketing increase consumer choice by providing variety. This benefits society and weighs in favor of the efficiency of mo nopolistic competition. However, selling costs can add to the product’s price. Also, at times the product differentiation is more apparent than real. These factors harm society and count against the efficiency of monopolistic competition.。
【国际经济学专题考试试卷十五】Monopoly
【国际经济学专题考试试卷十五】MonopolyChapter 15MonopolyTRUE/FALSE1. Monopolists can achieve any level of profit they desire because they have unlimited market power.ANS: F DIF: 2 REF: 15-0 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive2. Even with market power, monopolists cannot achieve any level of profit they desire because they will selllower quantities at higher prices.ANS: T DIF: 2 REF: 15-0 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive3. One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.ANS: F DIF: 2 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Definitional4. The fundamental cause of monopolies is barriers to entry.ANS: T DIF: 2 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive5. The De Beers Diamond company advertises heavily to promote the sale of all diamonds, not just its own. This is evidence that it has a monopoly position to some degree.ANS: T DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive6. The De Beers Diamond company is not worried about differentiating its product from all other gemstones. ANS: F DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive7. The amount of power that a monopoly has depends on whether there are close substitutes for its product. ANS: T DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive8. If the ABC company owns the exclusive rights to mine land in Afghanistan for Lapis Lazuli, a rare stone usedin jewelry which is found only in Afghanistan, the company benefits from a barrier to entry.ANS: T DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Applicative9. Copyrights and patents are examples of barriers to entry that afford firms monopoly pricing powers.ANS: T DIF: 2 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Patents MSC: Interpretive10. If the government deems a newly invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.ANS: F DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Patents MSC: Interpretive11. A natural monopoly has economies of scale for most if not all of its range of output.ANS: T DIF: 2 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Natural monopoly MSC: Applicative12. Declining average total cost with increased production is one of the defining characteristics of a naturalmonopoly.ANS: T DIF: 1 REF: 15-1 NAT: AnalyticLOC: Monopoly TOP: Natural monopoly MSC: Definitional1002Chapter 15/Monopoly 1003 13. A monopolist maximizes profit by producing an output level where marginal cost equals price.ANS: F DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive14. A monopolist produces an output level where marginal revenue equals marginal cost and charges a pricewhere marginal cost equals average total cost.ANS: F DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Applicative15. Average revenue for a monopoly is the total revenue divided by the quantity produced.ANS: T DIF: 1 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Average revenue MSC: Definitional16. For a monopoly, marginal revenue is often greater than the price they charge for their good.ANS: F DIF: 1 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Marginal revenue MSC: Interpretive17. Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginalcost.ANS: T DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive18. Like competitive firms, monopolies charge a price equal to marginal cost.ANS: F DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive19. A monopolist produces where P > MC = MR.ANS: T DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive20. A monopolist produces where P = MC = MR.ANS: F DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive21. A monopolist does not have a supply curve beca use the firm?s decision about how much to supply isimpossible to separate from the demand curve it faces.ANS: T DIF: 2 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Supply curve MSC: Interpretive22. A monopolist?s supply curve is vertical.ANS: F DIF: 1 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Supply curve MSC: Applicative23. A monopolist?s supply curve is horizontal.ANS: F DIF: 1 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Supply curve MSC: Applicative24. During the life of a drug patent, the monopoly pharmaceutical firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost.ANS: T DIF: 1 REF: 15-2 NAT: AnalyticLOC: Monopoly TOP: Profit maximization MSC: Interpretive25. The socially efficient quantity is found where the demand curve intersects the marginal cost curve.ANS: T DIF: 2 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Interpretive26. The deadweight loss for a monopolist equals one-half of its profits for any given level of output.ANS: F DIF: 2 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Interpretive1004 Chapter 15/Monopoly27. A monopoly creates a deadweight loss to society because it earns both short-run and long-run positiveeconomic profits.ANS: F DIF: 2 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Interpretive28. A monopoly creates a deadweight loss to society because it produces less output than the socially efficientlevel.ANS: T DIF: 2 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Interpretive29. Suppose a profit-maximizing monopolist faces a constant marginal cost of $10, produces an output level of100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $4,000.ANS: F DIF: 3 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Analytical30. Suppose a profit-maximizing monopolist faces a constant marginal cost of $10, produces an output level of100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $2,000.ANS: T DIF: 3 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Analytical31. Suppose a profit-maximizing monopolist faces a constant marginal cost of $20, produces an output level of100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $1,500.ANS: T DIF: 3 REF: 15-3 NAT: AnalyticLOC: Monopoly TOP: Deadweight loss MSC: Analytical32. In order for a firm to maximize profits through price discrimination, the firm must have some market power and be able to prevent arbitrage.ANS: T DIF: 2 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive33. Price discrimination is prohibited by antitrust laws.ANS: F DIF: 2 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive34. A monopolist earns higher profits by charging one price than by practicing price discrimination.ANS: F DIF: 3 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive35. A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society. ANS: T DIF: 3 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Perfect price discrimination MSC: Interpretive36. By selling hardcover books to die-hard fans and paperback books to less enthusiastic readers, the publisher is able to price discriminate and raise its profits.ANS: T DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive37. Movie theatres charge different prices to different groups of people based on the differing marginal costs thatexist from group to group.ANS: F DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive Chapter 15/Monopoly 1005 38. Airlines often separate theircustomers into business travelers and personal travelers by giving a discount tothose travelers who stay over a Saturday night.ANS: T DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive39. University financial aid can be viewed as a type of price discrimination.ANS: T DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive40. By offering lower prices to customers who buy a large quantity, a monopoly is price discriminating.ANS: T DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Price discrimination MSC: Interpretive41. Goods that do not have close substitutes have downward-sloping demand curves.ANS: T DIF: 1 REF: 15-4 NAT: AnalyticLOC: Monopoly TOP: Demand curve MSC: Interpretive42. If the government regulates the price a natural monopolist can charge to be equal to the firm?s average total cost, the firm has no incentive to reduce costs.ANS: T DIF: 2 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Regulation MSC: Interpretive43. If the government regulates the price a natural monopolist can charge to be equal to the firm?s marginal cost, the government will likely need to subsidize the firm.ANS: T DIF: 2 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Regulation MSC: Interpretive44. Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.ANS: T DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Antitrust MSC: Interpretive45. Some companies merge in order to lower costs through efficient joint production.ANS: T DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Antitrust MSC: Interpretive46. A common solution to monopoly in European countries is public ownership.ANS: T DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive47. The proper level of government intervention is unclear when dealing with a monopoly.ANS: T DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Regulation MSC: Interpretive48. The government may choose to do nothing to reduce monopoly inefficiency because the “fix” may be worse than the problem.ANS: T DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Do nothing MSC: Interpretive49. Government intervention always reduces monopoly deadweight loss.ANS: F DIF: 1 REF: 15-5 NAT: AnalyticLOC: Monopoly TOP: Do nothing MSC: Interpretive50. Firms with substantial monopoly power are quite common because many goods are truly unique.ANS: F DIF: 1 REF: 15-6 NAT: AnalyticLOC: Monopoly TOP: Monopoly MSC: Interpretive1006 Chapter 15/MonopolySHORT ANSWER1. Describe how government is involved in creating amonopoly. Why might the government create one? Give an example.ANS:The government can create a monopoly by giving a single firm the exclusive right to produce some good. Monopolies are created for many reasons. When an industry is characterized by high fixed costs, a single firm can usually supply the entire market at a lower cost than having multiple firms in the industry. Examples include most utility companies. The government also grants sole ownership of inventions through patent laws in order to help eliminate the market failure that is likely to otherwise occur in the markets for those goods. Patents encourage creativity and research and development.DIF: 2 REF: 15-1 NAT: Analytic LOC: MonopolyTOP: Patents | Regulation MSC: Applicative2. What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.ANS:The defining characteristic of a natural monopoly is when a firm can supply a good or service to an entire market at a lower cost than could two or more firms. The example in the text is a bridge.DIF: 2 REF: 15-1 NAT: Analytic LOC: MonopolyTOP: Natural monopoly MSC: Definitional3. In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel,natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable?Explain your answer.ANS:In this case, the firms are monopolists in the short run when consumers are unable to change their "home heating" systems. In the long run, consumers can change from electric appliances to natural gas appliances and thus lessen the monopoly power of utility providers. As long as consumers are able to substitute, in the long run the monopoly pricing power is reduced.DIF: 3 REF: 15-2 NAT: Analytic LOC: MonopolyTOP: Monopoly MSC: Analytical4. There has been much discussion of deregulating electricity and natural gas delivery companies in the UnitedStates. Discuss the likely effect of deregulation on prices in these two industries.ANS:If deregulation leads to increased competition, then production and prices should move toward the competitive equilibrium. If deregulation does not lead to increased competition, then the monopoly production and price outcome is likely. The success of deregulation movements hinges on their ability to use markets to promote competitive market outcomes. If the industry is characterized by economies of scale, deregulation may worsen rather than improve the market as costs and prices could rise if more than one firm supplies output to the market. DIF: 2 REF: 15-2 NAT: Analytic LOC: Monopoly TOP: Regulation MSC: Analytical5. Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods.ANS:A profit-maximizing monopolist produces the output levelwhere marginal revenue equals marginal cost and charges the corresponding price from the market demand curve. Note that a monopolist charges a price that exceeds marginal cost, unlike a competitive firm, for which price equals marginal cost.DIF: 2 REF: 15-2 NAT: Analytic LOC: MonopolyTOP: Profit maximization MSC: AnalyticalChapter 15/Monopoly 1007 6. Graphically depict the deadweight loss caused by a monopoly. How is this similar to the deadweight loss fromtaxation?ANS:A profit-maximizing monopolist will choose to produce Q0 units of output and sell at price P0. However, marginal cost is MC0. This is identical to the deadweight loss of taxation when the tax forces a wedge between market price and marginal cost.DIF: 2 REF: 15-3 NAT: Analytic LOC: MonopolyTOP: Deadweight loss MSC: Analytical7. What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10. The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and marginal revenue is $5. The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.ANS:1/2*(110-100)*($10-$5) = $25DIF: 3 REF: 15-3 NAT: Analytic LOC: MonopolyTOP: Deadweight loss MSC: Applicative8. Assume that a monopolist decides to maximize revenue rather than profit. How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and areinterested in reducing the deadweight loss of monopoly, should you maximize profits or maximize revenue?Explain your answer.ANS:A revenue maximizer operates where MR = 0. This solution moves the monopolist closer to the socially optimal competitive outcome and reduces deadweight loss. Revenue maximization is potentially a more "socially" optimal objective for monopoly markets than profit maximization.DIF: 3 REF: 15-3 NAT: Analytic LOC: MonopolyTOP: T otal revenue MSC: Analytical9. One example of price discrimination occurs in the publishing industry when a publisher initially releases anexpensive hardcover edition of a popular novel and later releases a cheaper paperback edition. Use thisexample to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy.ANS:The answer should address the three basic lessons of price discrimination. First, price discrimination is a rational strategy that can lead to higher monopoly profits. Second, price discrimination requires an ability to separate customers according to their willingness to pay. Third, price discrimination can raise economic welfare.DIF: 2 REF: 15-4 NAT: Analytic LOC: MonopolyTOP: Price discrimination MSC: Analytical。
国际经济学英文版选择题
Multiple-Choice Questions Ch.2（已学，可参考）1.The Mercantilists did not advocate:a. free tradeb. stimulating the nation's exportsc. restricting the nations' importsd. the accumulation of gold by the nation2.According to Adam Smith, international trade was based on:a. absolute advantageb. comparative advantagec. both absolute and comparative advantaged. neither absolute nor comparative advantage3.What proportion of international trade is based on absolute advantage?a. Allb. mostc. somed. none4.The commodity in which the nation has the smallest absolute disadvantage isthe commodityof its:a. absolute disadvantageb. absolute advantagec. comparative disadvantaged. comparative advantage5.If in a two-nation (A and B), two-commodity (X and Y) world, it isestablished that nationA has a comparative advantage in commodity X, then nationB must have:a. an absolute advantage in commodity Yb. an absolute disadvantage in commodity Yc. a comparative disadvantage in commodity Yd. a comparative advantage in commodity Y6.If with one hour of labor time nation A can produce either 3X or 3Y whilenation B canproduce either 1X or 3Y (and labor is the only input):a. nation A has a comparative disadvantage in commodity Xb. nation B has a comparative disadvantage in commodity Yc. nation A has a comparative advantage in commodity Xd. nation A has a comparative advantage in neither commodity7. With reference to the statement in Question 6:a. Px/Py=1 in nation Ab. Px/Py=3 in nation Bc. Py/Px=1/3 in nation Bd. all of the above8. With reference to the statement in Question 6, if 3X is exchanged for 3Y:a. nation A gains 2Xb. nation B gains 6Yc. nation A gains 3Yd. nation B gains 3Y9.With reference to the statement of Question 6, the range of mutuallybeneficial tradebetween nation A and B is:a. 3Y < 3X < 5Yb. 5Y < 3X < 9Yc. 3Y < 3X < 9Yd. 1Y < 3X < 3Y10. If domestically 3X=3Y in nation A, while 1X=1Y domestically in nation B:a. there will be no trade between the two nationsb. the relative price of X is the same in both nationsc. the relative price of Y is the same in both nationsd. all of the above11. Ricardo explained the law of comparative advantage on the basis of:a. the labor theory of valueb. the opportunity cost theoryc. the law of diminishing returnsd. all of the above12. Which of the following statements is true?a. The combined demand for each commodity by the two nations is negatively slopedb. the combined supply for each commodity by the two nations is rising stepwisec.the equilibrium relative commodity price for each commodity with tradeis given by theintersection of the demand and supply of each commodity by the two nationsd. all of the above13. A difference in relative commodity prices between two nations can be based upon adifference in:a. factor endowmentsb. technologyc. tastesd. all of the above14. In the trade between a small and a large nation:a. the large nation is likely to receive all of the gains from tradeb. the small nation is likely to receive all of the gains from tradec. the gains from trade are likely to be equally sharedd. we cannot say15. The Ricardian trade model has been empiricallya. verifiedb. rejectedc. not testedd. tested but the results were inconclusiveMultiple-Choice Questions ch.5（已学，可参考）1. The H-O model extends the classical trade model by:a. explaining the basis for comparative advantageb. examining the effect of trade on factor pricesc. both a and bd. neither a nor b2. Which is not an assumption of the H-O modela. the same technology in both nationsb. constant returns to scalec. complete specializationd. equal tastes in both nations3. With equal technology nations will have equal K/L in production if:a. factor prices are the sameb. tastes are the samec. production functions are the samed. all of the above4. We say that commodity Y is K-intensive with respect to X when:a. more K is used in the production of Y than Xb. less L is used in the production of Y than Xc. a lower L/K ratio is used in the production of Y than Xd. a higher K/L is used in the production of X than Y5. When w/r falls, L/Ka. falls in the production of both commoditiesb. rises in the production of both commoditiesc. can rise or falld. is not affected6. A nation is said to have a relative abundance of K if it has a:a. greater absolute amount of Kb. smaller absolute amount of Lc. higher L/K ratiod. lower r/w7. A difference in relative commodity prices between nations can be based ona difference in:a. technologyb. factor endowmentsc. tastesd. all of the above8. In the H-O model, international trade is based mostly on a difference in:a. technologyb. factor endowmentsc. economies of scaled. tastes9. According to the H-O-S model, trade reduces international differences in:a. relative but not absolute factor pricesb. absolute but not relative factor pricesc. both relative and absolute factor pricesd. neither relative nor absolute factor prices10. According to the H-O-S model, international trade will:a. reduce international differences in per capita incomesb. increases international differences in per capita incomesc. may increase or reduce international differences in per capita incomesd. lead to complete specialization11. The H-O model is a general equilibrium model because it deals with:a. production in both nationsb. consumption in both nationsc. trade between the two nationsd. all of the above12. The H-O model is a simplification of the a truly general equilibrium modelbecause it deals with:a. two nationsb. two commoditiesc. two factors of productiond. all of the above13. The Leontief paradox refers to the empirical finding that U.S.a. import substitutes are more K-intensive than exportsb. imports are more K-intensive than exportsc. exports are more L-intensive than importsd. exports are more K-intensive than import substitutes14. From empirical studies, we conclude that the H-O theory:a. must be rejectedb. must be accepted without reservationsc. can be accepted while awaiting further testingd. explains all international trade15. For factor reversal to occur, two commodities must be produced with:a. sufficiently different elasticity of substitution of factorsb. the same K/L ratioc. technologically-fixed factor proportionsd. equal elasticity of substitution of factorsMultiple-Choice Questions Ch. 6: （已学，可参考）1. Relaxing the assumptions on which the Heckscher-Ohlin theory rests:a. leads to rejection of the theoryb. leaves the theory unaffectedc. requires complementary trade theoriesd. any of the above.1.Which of the following assumptions of the Heckscher-Ohlin theory, whenrelaxed, leavethe theory unaffected?a. Two nations, two commodities, and two factorsb. both nations use the same technologyc. the same commodity is L-intensive in both nationsd. all of the above2.Which of the following assumptions of the Heckscher-Ohlin theory, whenrelaxed,require new trade theories?a. Economies of scaleb. incomplete specializationc. similar tastes in both nationsd. the existence of transportation costs3.International trade can be based on economies of scale even if both nationshave identical:a. factor endowmentsc. technologyd. all of the above5. A great deal of international trade:a. is intra-industry tradeb. involves differentiated productsc. is based on monopolistic competitiond. all of the above6. The Heckscher-Ohlin and new trade theories explains most of the trade:a. among industrial countriesb. between developed and developing countriesc. in industrial goodsd. all of the above4.The theory that a nation exports those products for which a large domesticmarket existswas advanced by:a. Linderb. Vernonc. Leontiefd. Ohlin8. Intra-industry trade takes place:a. because products are homogeneousb. in order to take advantage of economies of scalec. because perfect competition is the prevalent form of market organizationd. all of the above1.If a nation exports twice as much of a differentiated product that it imports,its intra-industry (T) index is equal to:a. 1.00b. 0.75d. 0.2510. Trade based on technological gaps is closely related to:a. the H-O theoryb. the product-cycle theoryc. Linder's theoryd. all of the above11. Which of the following statements is true with regard to the product-cycle theory?a. It depends on differences in technological changes over time among countriesb. it depends on the opening and the closing of technological gaps among countriesc. it postulates that industrial countries export more advanced products to lessadvanced countriesd. all of the above12. Transport costs:a. increase the price in the importing countryb. reduces the price in the exporting countryc. both of the aboved. neither a nor b.13. Transport costs can be analyzed:a. with demand and supply curvesb. production frontiersc. offer curvesd. all of the above14. The share of transport costs will fall less heavily on the nation:a. with the more elastic demand and supply of the traded commodityb. with the less elastic demand and supply of the traded commodityc. exporting agricultural productsd. with the largest domestic market15. A footloose industry is one in which the product:a. gains weight in processingb. loses weight in processingc. both of the aboved. neither a nor b.Multiple-Choice Questions Ch. 7（已学，可参考）1. Dynamic factors in trade theory refer to changes in:a. factor endowmentsb. technologyc. tastesd. all of the above2. Doubling the amount of L and K under constant returns to scale:a. doubles the output of the L-intensive commodityb. doubles the output of the K-intensive commodityc. leaves the shape of the production frontier unchangedd. all of the above.3. Doubling only the amount of L available under constant returns to scale:a. less than doubles the output of the L-intensive commodityb. more than doubles the output of the L-intensive commodityc. doubles the output of the K-intensive commodityd. leaves the output of the K-intensive commodity unchanged4. The Rybczynski theorem postulates that doubling L at constant relative commodity prices:a. doubles the output of the L-intensive commodityb. reduces the output of the K-intensive commodityc. increases the output of both commoditiesd. any of the above5. Doubling L is likely to:a. increases the relative price of the L-intensive commodityb. reduces the relative price of the K-intensive commodityc. reduces the relative price of the L-intensive commodityd. any of the above6. Technical progress that increases the productivity of L proportionately more than theproductivity of K is called:a. capital savingb. labor savingc. neutrald. any of the above7. A 50 percent productivity increase in the production of commodity Y:a. increases the output of commodity Y by 50 percentb. does not affect the output of Xc. shifts the production frontier in the Y direction onlyd. any of the above8. Doubling L with trade in a small L-abundant nation:a. reduces the nation's social welfareb. reduces the nation's terms of tradec. reduces the volume of traded. all of the above9. Doubling L with trade in a large L-abundant nation:a. reduces the nation's social welfareb. reduces the nation's terms of tradec. increases the volume of traded. all of the above10. If, at unchanged terms of trade, a nation wants to trade more after growth, then thenation's terms of trade can be expected to:a. deteriorateb. improvec. remain unchangedd. any of the above11. A proportionately greater increase in the nation's supply of labor than of capital is likelyto result in a deterioration in the nation's terms of trade if the nation exports:a. the K-intensive commodityb. the L-intensive commodityc. either commodityd. both commodities12. Technical progress in the nation's export commodity:a. may reduce the nation's welfareb. will reduce the nation's welfarec. will increase the nation's welfared. leaves the nation's welfare unchanged13. Doubling K with trade in a large L-abundant nation:a. increases the nation's welfareb. improves the nation's terms of tradec. reduces the volume of traded. all of the above14. An increase in tastes for the import commodity in both nations:a. reduces the volume of tradeb. increases the volume of tradec. leaves the volume of trade unchangedd. any of the above15. An increase in tastes of the import commodity of Nation A:a. will reduce the terms of trade of Nation Ab. will increase the terms of trade of Nation Ad. any of the aboveMultiple-choice Questions Ch.8（已学，可参考）1. Which of the following statements is incorrect?a.An ad valorem tariff is expressed as a percentage of the value of thetradedcommodityb. a specific tariff is expressed as a fixed sum of the value of the traded commodity.c. export tariffs are prohibited by the U.S. Constitutiond. The U.S. uses exclusively the specific tariff2. A small nation is one:a. which does not affect world price by its tradingb. which faces an infinitely elastic world supply curve for its import commodityb.whose consumers will pay a price that exceeds the world price by theamount of thetariffd. all of the above3. If a small nation increases the tariff on its import commodity, its:a. consumption of the commodity increasesb. production of the commodity decreasesc. imports of the commodity increased. none of the above4.The increase in producer surplus when a small nation imposes a tariff ismeasured by thearea:a. to the left of the supply curve between the commodity price with and without thetariffb. under the supply curve between the quantity produced with andc. under the demand curve between the commodity price with and without the tariffd. none of the above.5. If a small nation increases the tariff on its import commodity:a. the rent of domestic producers of the commodity increasesb. the protection cost of the tariff decreasesc. the deadweight loss decreasesd. all of the above6. Which of the following statements is incorrect with respect to the rate of effectiveprotection?a. for given values of ai and ti, g is larger the greater is tb. for a given value of t and ti, g is larger the greater is a ic. g exceeds, is equal to or is smaller than t, as t i is smaller than, is equalto or islarger than td. when a i t i exceeds t, the rate of effective protection is positive7. With a i=50%, t i=0, and t=20%, g is:a. 40%b. 20%c. 80%d. 08. The imposition of an import tariff by a small nation:a. increases the relative price of the import commodity for domestic producers andconsumersb.reduces the relative price of the import commodity for domesticproducers andconsumersc. increases the relative price of the import commodity for the nation as a wholed. any of the above is possible9. The imposition of an import tariff by a small nation:a. increases the nation's welfareb. reduces the nation's welfarec. leaves the nation's welfare unchangedd. any of the above is possible10. According to the Stolper-Samuelson theorem, the imposition of a tariff by a nation:a. increases the real return of the nation's abundant factorb. increases the real return of the nation's scarce factorc. reduces the real return of the nation's scarce factord. any of the above is possible11. The imposition of an import tariff by a nation results in:a. an increase in relative price of the nation's import commodityb. an increase in the nation's production of its importable commodityc. reduces the real return of the nation's abundant factord. all of the above12. The imposition of an import tariff by a nation can be represented by a rotation of the:a. nation's offer curve away from the axis measuring the commodity of its comparativeadvantageb.the nation's offer curve toward the axis measuring the commodity of itscomparativeadvantagec.the other nation's offer curve toward the axis measuring the commodityof itscomparative advantaged.the other nation's offer curve away from the axis measuring thecommodity of itscomparative advantage13. The imposition of an import tariff by a large nation:a. increases the nation's terms of tradec. may increase or reduce the nation's welfared. all of the above14. The imposition of an optimum tariff by a large nation:a. improves its terms of tradeb. reduces the volume of tradec. increases the nation's welfared. all of the above15. The optimum tariff for a small nation is:a. 100%b. 50%c. 0d. depends on elasticitiesMultiple-choice Questions for Ch. 13（已学，可参考）1. Which of the following is false?a. A credit transaction leads to a payment from foreignersb. A debit transaction leads to a payment to foreignersc. A credit transaction is entered with a negative signd. Double-entry bookkeeping refers to each transaction entered twice.2. Which of the following is a debit?a. The export of goodsb. The export of servicesc. Unilateral transfers given to foreignersd. Capital inflows3. Capital inflows:a. refer to an increase in foreign assets in the nationb. refer to a reduction in the nation's assets abroadc. lead to a payment from foreignersd. all of the above4. When a U.S. firm imports goods to be paid in three months the U.S. credits:a. the current accountb. unilateral transfersc. capitald. official reserves5.The receipt of an interest payment on a loan made by a U.S. commercialbank to a foreignresident is entered in the U.S. balance of payments as a:a. credit in the capital accountb. credit in the current accountc. credit in official reservesd. debit in unilateral transfers6. The payment of a dividend by an American company to a foreign stockholder represents:a. a debit in the U.S. capital accountb. a credit in the U.S. capital accountc. a credit in the U.S. official reserve accountd. a debit in the U.S. current account7 .When a U.S. firm imports a good from England a pays for it by drawing on its poundsterling balances in a London Bank, the U.S. debits its current account and credits its:a. official reserve accountb. unilateral transfers accountc. services in its current accountd. capital account8. When the U.S. ships food aid to a developing nation, the U.S. debits:a. unilateral transfersb. servicesc. capitald. official reserves9. When the resident of a foreign nation (1) sells a U.S. stock and (2) deposits the proceeds ina U.S. bank, the U.S.:a. credits capital for (1) and debits capital for (2)b. credits the current account and debits capitalc. debits capital and credits official reservesd. debits capital for (1) and credits capital for (2)-126-1.When a U.S. resident (1) purchases a foreign treasury bill and pays by (2)drawing down hisbank balances abroad:a. debits short-term capital and credits official reservesb. debits capital for (1) and credits capital for (2)c. debits official reserves and credits capitald. credits short-term capital and debits official reserves11. From the U.S. point of view, drawing on (reducing) foreign bank balances in a New Yorkbank represents a:a. capital inflowb. capital outflowc. outflow of official reservesd. debit in the current account11. Which is not an official reserve asset of the U.S.?a. U.S. holdings of Special Drawing Rightsb. The U.S. reserve position in the International Monetary Fundc. Foreign official holdings of U.S. dollarsd. Official holdings of foreign currencies by U.S. monetary authorities13. The capital account of the U.S. includes:a. the change in U.S. assets abroad and foreign assets in the U.S.b. the change in U.S. assets abroad and foreign assets in the U.S., other than officialreserve assetsc. all financial assetsd. all but current account transactions14. Accommodating items are:b. the items below the linec. needed to balance international transactionsd. all of the above15. Which of the following is false?a. a net debit balance in the current and capital accounts measures the surplus in thenation's balance of paymentsb. a balance of payments deficit must be settled by a net credit in the official reserveaccountb.a deficit in the balance of payments can be measured by the excess ofcredits overdebits in the official reserve accountd. a net debit balance in the official reserve account refers to a surplus。
Chapter 14 Monopolistic Competition
MC
Demand MR 0 Quantity Efficient produced scale Quantity Excess capacity 0
Quantity produced = Efficient scale
Quantity
Panel (a) shows the long-run equilibrium in a monopolistically competitive market, and panel (b) shows the long-run equilibrium in a perfectly competitive market. Two differences are notable. (1) The perfectly competitive firm produces at the efficient scale, where average total cost is minimized. By contrast, the monopolistically competitive firm produces at less than the efficient scale. (2) Price equals marginal cost under perfect competition, but price is above marginal cost under monopolistic competition.
14.5 Advertising
•8
14.3 Long Run Equilibrium
•9
If firms are making profit in short run
New
firms - incentive to enter the market Increase number of products Reduces demand faced by each firm
高二英语经济规律单选题50题
高二英语经济规律单选题50题1. In a small town, there are only a few large companies that control most of the market. This is an example of _.A. perfect competitionB. monopolistic competitionC. oligopolyD. monopoly答案：C。
解析：本题考查市场结构相关知识。
寡头垄断（oligopoly）是指少数几家厂商控制整个市场的产品的生产和销售的这样一种市场组织。
在这个小镇上只有少数几家大公司控制大部分市场，符合寡头垄断的特点。
选项A完全竞争（perfect competition）是指有许多企业生产和销售同质产品，市场参与者都是价格接受者的市场结构，与题意不符。
选项B垄断竞争 monopolistic competition）是许多厂商生产和销售有差别的同种产品的市场组织，这里强调的是少数大公司控制市场，不是垄断竞争。
选项D垄断（monopoly）是指一个企业完全控制一个行业的全部供给的市场结构，这里是少数几家公司而非一家公司控制市场，所以也不正确。
2. When the demand for a product is greater than the supply, what usually happens to the price?A. It stays the sameB. It decreasesC. It fluctuates randomlyD. It increases答案：D。
解析：根据供求关系原理，当需求（demand）大于供给 supply）时，通常会出现供不应求的情况，在这种情况下价格会上升（increase）。
选项A价格保持不变不符合供求关系对价格的影响规律。
选项B价格下降是在供大于求的情况下才会发生的。
(完整版)克鲁格曼国际经济学答案
Chapter 61.For each of the following examples, explain whether this is a case of external or internaleconomies of scale:a.Most musical wind instruments in the United States are produced by more than adozen factories in Elkhart, Indiana.b.All Hondas sold in the United States are either imported or produced in Marysville,Ohio.c.All airframes for Airbus, Europe’s only producer of large aircraft, are assembled inToulouse, France.d.Hartford, Connecticut is the insurance capital of the northeastern United States.External economies of scale: Cases a and d. The productions of these two industries concentrate in a few locations and successfully reduce each industry's costs even when the scale of operation of individual firms remains small. External economies need not lead to imperfect competition. The benefits of geographical concentration may include a greater variety of specialized services to support industry operations and larger labor markets or thicker input markets.Internal economies of scale: Cases b and c. Both of them occur at the level of the individual firm. The larger the output of a product by a particular firm, the lower its average costs. This leads to imperfect competition as in petrochemicals, aircraft, and autos.2.In perfect competition, firm set price equal to marginal cost. Why isn’t this possiblewhen there are internal economies of scale?Unlike the case of perfectly competitive markets, under monopoly marginal revenue is not equal to price. The profit maximizing output level of a monopolist occurs where marginal revenue equals marginal cost. Marginal revenue is always less than price under imperfectly competitive markets because to sell an extra unit of output the firm must lower the price of all units, not just the marginal one.3.It is often argued that the existence of increasing returns is a source of conflict betweencountries, since each country is better off if it can increase its production in those industries characterized by economies of scale. Evaluate this view in terms of both the monopolistic competition and the external economy models.Both internal economies of scale (which may lead to monopolistic competition) and external economies of scale could lead to increasing returns.By concentrating the production of each good with economies of scale in one country rather than spreading the production over several countries, the world economy will use the same amount of labor to produce more output.In the monopolistic competition model, the concentration of labor benefits the host country.The host country can capture some monopoly rents. But the rest of the world may hurt and have to face higher prices on its consumption goods.In the external economies case, such monopolistic pricing behavior is less likely since imperfectly competitive markets are less likely.4.Suppose the two countries we considered in the numerical example on pages 132-135were to integrate their automobile marker with a third country with an annual market for 3.75 million automobiles. Find the number of firms, the output per firm, and theprice per automobile in the new integrated market after trade.15.8n X 1c P c AC 2=⇒==−−→−+=+==nS Fb S n bn X F AC P However, since you will never see 0.8 firms, there will be 15 firms that enter the market, not16 firms since the last firm knows that it can not make positive profits. The rest of the solution is straight-forward. Using X=S/n, output per firm is 41,666 units. Using the price equation, and the fact that c=5,000, yields an equilibrium price of $7,000.5.Evaluate the relative importance of economies of scale and comparative advantage incausing the following:a.Most of the world’s aluminum is smelted in Norway or Canada.b.Half of the world’s large jet aircraft are assembled in Seattle.c.Most semiconductors are manufactured in either the United States or Japan.d.Most Scotch whiskey comes from Scotland.e.Much of the world’s best wine comes from France.a. The relatively few locations for production suggest external economies of scale in production. If these operations are large, there may also be large internal economies of scale in production.b. Since economies of scale are significant in airplane production, it tends to be done by a small number of (imperfectly competitive) firms at a limited number of locations. One such location is Seattle, where Boeing produces.c. Since external economies of scale are significant in semiconductor production, semiconductor industries tend to be concentrated in certain geographic locations. If, for some historical reason, a semiconductor is established in a specific location, the export of semiconductors by that country is due to economies of scale and not comparative advantage.d. "True" scotch whiskey can only come from Scotland. The production of scotch whiskey requires a technique known to skilled distillers who are concentrated in the region. Also, soil and climactic conditions are favorable for grains used in local scotch production. This reflects comparative advantage.e. France has a particular blend of climactic conditions and land that is difficult to reproduce elsewhere. This generates a comparative advantage in wine production.6.There are some shops in Japan that sell Japanese goods imported back from the UnitedStates at a discount over the prices charged by other Japanese shops. How is this possible?The Japanese producers employ price discrimination across United States and Japanesemarkets, so that the goods sold in the United States are much cheaper than those sold in Japan. It may be profitable for other Japanese to purchase these goods in the United States, incur any tariffs and transportation costs, and resell the goods in Japan. Clearly, the price differential across markets may lead to such profitable chance.7.Consider a situation similar to that in Figure 6-9, in which two countries that canproduce a good are subject to forward-falling supply curves. In this case, however, suppose that the two countries have the same costs, so that their supply curves are identical.a.What would you expect to be the pattern of international specialization and trade?What would determine who produces the good?QP,CD AC AC External Economics and SpecializationSuppose two countries that can produce a good are subject to forward-falling supply curves and are identical countries with identical curves. If one country starts out as a producer of a good, i.e. it has a head start even as a matter of historical accident, then all production will occur in that particular country and it will export to the rest of the world.b.What are the benefits of international trade in this case? Do they accrue only to thecountry that gets the industry?Consumers in both countries will pay a lower price for this good when externaleconomies are maximized through trade and all production is located in a single market. In the present example, no single country has a natural cost advantage or is worse off than it would be under autarky.8.It is fairly common for an industrial cluster to break up and for production to move tolocations with lower wages when the technology of the industry is no longer rapidly improving—when it is no longer essential to have the absolutely most modern machinery, when the need for highly skilled workers has declined, and when being at the cutting edge of innovation conveys only a small advantage. Explain this tendency of industrial clusters to break up in terms of the theory of external economies.External economies are important for firms as technology changes rapidly and as the“cutting edge” moves quickly with frequent innovations. As this process slows, manufacturing becomes more normal and standard and there is less advantage brought by external economies. Instead, firms look for low cost production locations. Since external economies are no longer important, firms find little advantage in being clustered and it is likely that low-wage locations will be chosen.chapter 81.The import demand equation, MD , is found by subtracting the home supply equation from the home demand equation. This results in MD = 80 - 40 x P. Without trade, domestic pricesand quantities adjust such that import demand is zero. Thus, the price in the absence of trade is 2.2.a.Foreign's export supply curve, XS , is XS = -40 + 40 x P. In the absence of trade, the price is 1.b.When trade occurs export supply is equal to import demand, XS = MD . Thus, using theequations from problems 1 and 2a, P = 1.50, and the volume of trade is 20.3.a.The new MD curve is 80 - 40 x (P+t) where t is the specific tariff rate, equal to 0.5. (Note: in solving these problems you should be careful about whether a specific tariff or ad valorem tariff is imposed. With an ad valorem tariff, the MD equation would be expressed as MD =80-40 x (1+t)P). The equation for the export supply curve by the foreign country is unchanged. Solving, we find that the world price is $1.25, and thus the internal price at home is $1.75. The volume of trade has been reduced to 10, and the total demand for wheat at home has fallen to 65 (from the free trade level of 70). The total demand for wheat in Foreign has gone up from 50 to 55.b.andc. The welfare of the home country is best studied using the combined numerical andgraphical solutions presented below in Figure 8-1.P T =1.7550556070QuantityPrice P W =1.50P T*=1.25where the areas in the figure are:a: 55(1.75-1.50) -.5(55-50)(1.75-1.50)=13.125b: .5(55-50)(1.75-1.50)=0.625c: (65-55)(1.75-1.50)=2.50d: .5(70-65)(1.75-1.50)=0.625e: (65-55)(1.50-1.25)=2.50Consumer surplus change: -(a+b+c+d)=-16.875. Producer surplus change: a=13.125. Government revenue change: c+e=5. Efficiency losses b+d are exceeded by terms of trade gain e. [Note: in the calculations for the a, b, and d areas a figure of .5 shows up. This is because we are measuring the area of a triangle, which is one-half of the area of the rectangle defined by the product of the horizontal and vertical sides.]4. Using the same solution methodology as in problem 3, when the home country is very small relative to the foreign country, its effects on the terms of trade are expected to be much less. The small country is much more likely to be hurt by its imposition of a tariff. Indeed, this intuition is shown in this problem. The free trade equilibrium is now at the price $1.09 and the trade volume is now $36.40.With the imposition of a tariff of 0.5 by Home, the new world price is $1.045, the internal homeprice is $1.545, home demand is 69.10 units, home supply is 50.90 and the volume of trade is 18.20. When Home is relatively small, the effect of a tariff on world price is smaller than when Home is relatively large. When Foreign and Home were closer in size, a tariff of .5 by home lowered world price by 25 percent, whereas in this case the same tariff lowers world price by about 5 percent. The internal Home price is now closer to the free trade price plus t than when Home was relatively large. In this case, the government revenues from the tariff equal 9.10, the consumer surplus loss is 33.51, and the producer surplus gain is 21.089. The distortionary losses associated with the tariff (areas b+d) sum to 4.14 and the terms of trade gain (e) is 0.819. Clearly, in this small country example the distortionary losses from the tariff swamp the terms of trade gains. The general lesson is the smaller the economy, the larger the losses from a tariff since the terms of trade gains are smaller.5. The effective rate of protection takes into consideration the costs of imported intermediate goods. In this example, half of the cost of an aircraft represents components purchased from other countries. Without the subsidy the aircraft would cost $60 million. The European value added to the aircraft is $30 million. The subsidy cuts the cost of the value added to purchasers of the airplane to $20 million. Thus, the effective rate of protection is (30 - 20)/20 = 50%.6. We first use the foreign export supply and domestic import demand curves to determine the new world price. The foreign supply of exports curve, with a foreign subsidy of 50 percent per unit, becomes XS= -40 + 40(1+0.5) x P. The equilibrium world price is 1.2 and the internal foreign price is 1.8. The volume of trade is 32. The foreign demand and supply curves are used to determine the costs and benefits of the subsidy. Construct a diagram similar to that in the text and calculate the area of the various polygons. The government must provide (1.8 - 1.2) x 32 = 19.2 units of output to support the subsidy. Foreign producers surplus rises due to the subsidy by the amount of 15.3 units of output. Foreign consumers surplus falls due to the higher price by7.5 units of the good. Thus, the net loss to Foreign due to the subsidy is 7.5 + 19.2 - 15.3 = 11.4 units of output. Home consumers and producers face an internal price of 1.2 as a result of the subsidy. Home consumers surplus rises by 70 x .3 + .5 (6 x.3) = 21.9 while Home producers surplus falls by 44 x .3 + .5(6 x .3) = 14.1, for a net gain of 7.8 units of output.7. At a price of $10 per bag of peanuts, Acirema imports 200 bags of peanuts. A quota limiting the import of peanuts to 50 bags has the following effects:a.The price of peanuts rises to $20 per bag.b. The quota rents are ($20 - $10) x 50 = $500.c. The consumption distortion loss is .5 x 100 bags x $10 per bag = $500.d. The production distortion loss is .5 x50 bags x$10 per bag = $250.。
国际经济学基础题库
I. Explain the following terms (20 points. Each worth 4 points.)1. Heckscher-Ohlin theorem2. Market-Oriented Industries3. Strategic Trade Policy4. ad valorem tariff5. Dumping6. opportunity cost theory7.Factor-price equalization theorem8. Intra-industry trade9. Economic Integration10.Increasing Returns to Scale11. Immiserizing growth124. Export subsidy13. Optimum tariffII. Multiple Choice (40 Points. Each worth 2 points.)1. Strategic trade policy is unsuitable in such fields as ( c ).A. computersB. telecommunicationsC. clothD. industries that are crucial to future growth2. What is obveriously fallacious argument for protection.（ a ）A. scientific tariffB. to reduce domestic unemploymentC. cure a deficitD. safe of infant industry3. In H-O theory, what is supposed not equal. ( c )A. technologyB. tastesC. supply of factorsD. income distribution4. Trade restrictions are justified to counteract ( a ).A. predatory dumpingB. persistent dumpingC. sporadic dumpingD. dumping5. What limits imports to the specified level with certainty? ( b )A. import tariff.B. import quotas.C. technical regulationsD. procurement policies6. ( c ) is expressed as a fixed sum per physical unit the traded commodity .A. ad valorem tariffB. compound tariffC. specific tariffD. border tariff7. What is not the base of Ricardo’s comparative advantage ( d )A. free tradeB. only two nations and two commoditiesC. no transportation costs.D. technical is changed with time.8. The marginal rate of substitution(MRS) of X for Y in consumption refers to ( a )A. the amount of Y that a nation could give up for one extra unit of X and still remain on the same indifference curveB. the amount of X that a nation could give up for one extra unit of Y and still remain on the same indifference curve.C. the amount of Y that a nation could give up for one extra unit of X and reach on a higher indifference curveD. the amount of Y that a nation could give up for one extra unit of X and reach on a lower indifference curve9. What is the basis for beggar-thy-neighbor argument? ( b ).A. Factor Endowments.B. Protectionism.C. Comparative advantage.D. Strategic trade policy10.According to nation’s resources, which nation has a highest level of interdependence? ( a )A. SingaporeB. U.S.A.C. China.D. Japan.11.who can really get protected? ( d )A. Capital-intensive industriesB. industries that are not highly organizedC. industries that employ a small number of workers.D. Labor-intensive industries12.The community indifference curves are ( b ).A. Negatively sloped and concave to the origin.B. Negatively sloped and convex from the origin.C. Positively sloped and concave to the origin.D. Positively sloped and convex from the origin.13.The form or market organization where there are many firms selling a differentiated product and entry into or exit from the industry is easy is called ( b )A. Complete competition.B. Monopolistic competitionC. Uncomplete competition.D. Oligopolistic competition.14.Increase returns to scale refers to that ( a ).A. If all inputs are doubled, output is more than doubled.B. If all inputs are doubled, output is than doubledC. Output grows proportionately less than the increase in inputsD. Output grows proportionately equal to the increase in inputs15.The terms of trade ( b ).A. is the ratio of the price of its import commodity to the price of its export commodityB. is the ratio of the price of its export commodity to the price of its import commodityC. should not be given by the ratio of the price index.D. When a nation’s terms of trade improve, we can conclude that the nation is necessarily better off because of this.16. Dumping is ( a )A. Export a commodity at below cost or at least sell a commodity at a lower price abroad than domestically.B. Trade volume increases greatly.C. Import does harm to local industry.D. All the above.17.A customs union is more likely to lead to trade creation and increased welfare under the following condition: ( a ).A. The lower are the preunion trade barriers of member countriesB. The higher are the customs union’s barriers on trade with the rest of the world.C. The greater is the number of countries forming the customs union.D. The less competitive rather than complementary are the economies of member nations.18.Which one is not the benefit from the formation of a customs union ( a ).A. decreased competitionB. economies of scaleC. stimulus to investmentD. better utilization of the economic resources of the entire community19.Which one is not the attempts at Economic Integration among developing countries ( b )A. the free trade area of the Americas.B. OPECC. the east African economic communityD. the southern common market20. At what stage does the production is perfected in the innovating country? ( )A. StageⅠ.B. StageⅡ.C. StageⅢ.D. StageⅣ.21. Which of the following is not suitable for explaining the theory of i ntra-industry trade ( ).A. overlapping demands hypothesisB. factor-endowment theoryC. the theory of economies of scaleD. monopolistic competition22. The degree of economic integration varies across forms. Of all the forms below, which involves no sacrifice of autonomy in trade policies towards nonmembers ( c ).A. a common marketB. a customs unionC. a free trade areaD. an economic union23. Which of the following is not the subject matter of international finance?( c )A. foreign exchange marketsB. the balance of paymentsC. the basis and the gains from tradeD. policies to adjust balance of payments disequilibria24. The effect that international trade has on the distribution of income within a nation is that international trade will ( d ).A. cause the real income to rise of factor intensive in the production of import-competing commoditiesB. cause the real income to rise of all factors used in the production of import-competing commoditiesC.cause the real income to rise of all factors used in the production of export commoditiesD. cause the real income to rise of factor intensive in the production of export commodities25. Which curve reflects the tastes or demand preference in a nation ( b ).A. the marginal rate of transformationB. community indifference curveC. the production frontierD. the marginal rate of substitution26. The first economist to bring the law of comparative advantage into the picture is ( c ).A. Bertil OhlinB. Eli HeckscherC. David RicardoD. Adam Smith27. According to classical economists, comparative advantage was based on ( a ).A. the difference in the productivity of laborB. technological differenceC. the difference in the product quality.D. the difference in the relative commodity price28. Which of the following circumstances leads to the rejection of the factor-price equalization theorem ( d ).A. no factor mobility between industriesB. the productivity of factor of production varies in nationsC. all trading nations establish barriers to the free flow of international tradeD. all of above29. The Mercantilists did not advocated: ( a)A. free tradeB. stimulating the nation's exportsC. restricting the nations' importsD. the accumulation of gold by the nation30. A difference in relative commodity prices between nations can be based on a difference in: ( c )A. technologyB. factor endowmentsC. tastesD. all of the above31. According to strategic trade and industrial policy, the following may well be chosen as the targeted industries to the exclusion of ( d ).A. automobile industryB. biotechnologyC. clothing & apparelD. Aeronautics & astronomy32. Suppose a product sells for $10,000 but has input costs of $5,000 per unit.In this case, its value added is $5,000.The imposition of a 10% ad valorem tariff on the final commodity raises the sales price from $10,000 to $11,000. How much is the effective rate of protection? ( d )A. 0%B. 5%C. 10%D. 20%33. Suppose after the formation of the Europe Union, the British switched to the import of cheese from Irish that was a high-cost producer of cheese, rather than purchased from New Zealand where cheese was cheaper. This is, to some extent, a reflection of ( b ).A. trade creationB. trade diversionC. government's intervention in the cheese marketD. common sense34. Since an import quota involves the distribution of import licenses, the government must have efficiency considerations as the basis for distribution of the import licenses. From the point of view of the economy as a whole, the best way to allocate licenses is through ( b ).A. arbitrary official judgmentsB. the auctioning of licenses to the highest bidder in a competitive marketC. the government’s issuingD. potential importers' application for licenses35. Which of the following barriers does not fall under the heading of non-tariff barriers ( d ).A. voluntary export restraintsB. Technical and administrative regulationsC. import quotaD. import tariff36. The optimum tariff, which makes sense to a large nation only, is supposed to be ( b ).A. a zero import tariffB. somewhere between a zero import tariff and a prohibitive tariffC. a prohibitive tariffD. over and above a prohibitive tariff37. For a small nation, its welfare in static nature ( ) as a result of its imposition of a tariff on its imported commodities.A. decreasesB. increasesC. remains constantD. we have no way of knowing for sure.38. Export subsidies can be regarded as a form of dumping, and as is viewed by the WTO, constitute unfair competition. So there is justification for foreign governments to retaliate by levying ( d ).A. antidumping dutiesB. variable import leviesC. import tariffsD. countervailing duties39.International capital flows increase the national income of both the investing and host countries, but the relative share going to capital and labor is different in both the investing and host countries. From the point of view of the investing nation, which of the following statements is true ( c ).A. The level of employment tends to rise.B. In the short-run, the balance of payments tends to better off.C. the relative share going to capital falls and the share to labor rises.D. the relative share going to capital rises and the share to labor falls.40. From the point of view of the world as a whole,international labor migration increases the efficiency in the allocation of labor resources internationally and as a result the world output and welfare ( a ).A. increasesB. decreasesC. remains unchangedD. depends on the relative strength of economic costs against economic benefits of international labor migration41.If PW /PC=2/3 in the U.S. and PW/PC=2 in the U.K. We can say that U.S. has a _____in theproduction of cloth, and U.K. has a_____ in the production of wheat. ( )A. comparative advantage , comparative advantageB. comparative advantage , absolute advantageC. comparative disadvantage , comparative advantageD. comparative disadvantage, comparative disadvantage42.Suppose that the terms of trade of a nation improved from 100 to 120 over a given period of time, by how much did the terms of trade of its partner deteriorate? ( a )A.83B.100C.120D.2043. What is the basis for beggar-thy-neighbor argument? ( b ).A. Factor Endowments.B. Protectionism.C. Comparative advantage.D. Strategic trade policy44. The H-O theorem isolates ( b) among nations as the basic cause of the international trade.A. the difference in the productivityB. the difference in the relative factor abundanceC. the pretrade difference in the relative commodity priceD. the difference in the technology45. The reduction in each firm’s average costs of production as entire industry output expands is called (b) .A. economies of scaleB. external economiesC. increasing returns to scaleD. overlapping demands46. According to the specific-factor model, trade will benefit the immobile factors specific to the nation's__________, and harm the immobile factors specific to the nation's________. ( d)A. export commodities or sectors, export commodities or sectorsB. import-competing commodities or sectors, export commodities or sectorsC. import-competing commodities or sectors, import-competing commodities or sectors.D. export commodities or sectors, import-competing commodities or sectors.47. Comparative advantage seems to determine the pattern of ______,while economies of scale in differentiated products give rise to ______. ( a)A. inter-industry trade, intra-industry tradeB. inter-industry trade, inter-industry tradeC. intra-industry trade, intra-industry tradeD. intra-industry trade, inter-industry trade48. The continuous tendency of a domestic monopolist to maximize total profits by selling the commodity at a higher price in the domestic market than abroad is called ( a ).A. Persistent dumpingB. Predatory dumpingC. Sporadic dumpingD. Export subsidies49. When lower-cost imports from outside the customs union are replaced by higher-cost imports from a customs union member, ( c ) occurs.A. Trade creationB. Trade-Creating Customs UnionC. Trade diversionD. Trade-Diverting Customs Union50. A(n) ________________ MRS would result in a community indifference curve that is__________ from the origin. ( b )A. increasing, convexB. declining, convexC. constant, concaveD. declining, concave51. In nation 1, we need 3K and 12L to produce a unit commodity X, 2K and 2L to produce a unit commodity Y. Which one is right? ( c)A. Both X and Y are all K-intensive.B. X is K-intensive while Y is L-intensive.C. X is L-intensive while Y is K-intensive.D. Both X and Y are all L-intensive.52. When a large nation imposes tariff, ( ).A. It will increase its trade volume and improve nation’s terms of trade.B. It will reduce its trade volume but improve nation’s terms of trade.C. It will increase its trade volume and deteriorate nation’s terms of trade.D. It will reduce its trade volume and deteriorate nation’s terms of trade.53. With a given import quota, an increase in demand will result in ( a ).A. Higher domestic price and greater domestic production than with an equivalent import tariff.B. Higher domestic price and smaller domestic production than with an equivalent import tariff.C. Lower domestic price and greater domestic production than with an equivalent import tariff.D. Lower domestic price and smaller domestic production than with an equivalent import tariff.54. Customs union that leads to both trade creation and trade diversion ( c)A. increases the welfare of member and nonmember nationsB. reduces the welfare of member and nonmember nationsC. increases the welfare of member nations but reduces that of nonmembersD. reduces the welfare of nonmembers and may increase or reduce that of members55. When a nation lower the import tariff on raw materials, the rate of effective protection tend to ( ).A. increaseB. decreaseC. remain unchangedD. uncertainty56. Strategic trade policy is unsuitable in such fields as ( c).A. computersB. telecommunicationsC. clothD. industries that are crucial to future growth57. With increasing costs, even if two nations have identical production possibility frontier, there will still be a basis for mutually beneficial trade if tastes in the two nations differ. The nation with a relatively larger demand for a commodity will have a ( d )in the commodity.A. comparative advantageB. comparative disadvantageC. absolute advantageD. absolute disadvantage58. If only the supply of labor increases in a nation, the nation’s production frontier shifts ( a ).A. only along the axis measuring the L-intensive commodityB. only along the axis measuring the K-intensive commodityC. more along the axis measuring the L-intensive commodityD. in the same proportion along both axis59. Which one is not the benefit from the formation of a customs union ( a ).A. decreased competitionB. economies of scaleC. stimulus to investmentD. better utilization of the economic resources of the entire community60. A customs union is more likely to lead to trade creation and increased welfare under the following condition: ( a ).A. The lower are the preunion trade barriers of member countriesB. The higher are the customs union’s barriers on trade with the rest of the world.C. The greater is the number of countries forming the customs union.D. The less competitive rather than complementary are the economies of member nations.III. Briefly expound your understanding of the following questions (each is worth 10 points)1. Please expound the main content of H-O theorem, and explain the theories briefly.2. What are the static effects of customs union?3. Please give the explanation of transportation costs4.Give some samples about nontariff trade barriers during the past two decades.5 What are the keys and conclusion of Absolute advantage theory?6. For all the good that multinational corporations (MNCs) bring about, such as increase in the world output and welfare, they can equally create serious problems in the home nation. What are the problems in the home nation?Calculation (one question, 10 points)This is the partial equilibrium effect of an export subsidy. At the free trade price of P X =$3.50, the small nation is a net exporter of commodity X. If the government of the small nation now provides a subsidy of $0.50 on each unit of commodity X exported, P X rises to P X =$4 for domestic producers and consumers. You are required to analyze:1. What are the effects on the production, consumption and trade volume as a result of an export subsidy?2. What are the static welfare effect ―consumer loss, producer gain, cost of government subsidy, and deadweight loss of the small nation?Fill in the blanks according the following figure (8 points).The free trade price is __________, the consumption is____________. The domestic production is __________. The imports are _______________. With 50% ad valorem import tariff the price for the whole nation is ___ _____, the consumption is ________, theproduction is _______. The imports are _____________.Effective rate of protection (12 points)Suppose that an automobile sells on the world market for $100,000 and the parts out of which that automobile is made sell for $80,000. If 10% ad valorem tariff is collected on the automobile, (a) what is the effective rate of protection? If (b) 10% and (c) 20% ad volorem are collected on the parts, what are the effective rates of protection? (d) What conclusion can we get if 20% tariff is collected on the parts?Please analysis the effect of Trade-Diverting Customs Union according to the following figure, calculating the gains and losses from trade creation, trade diversion ,and net effect ofTrade-Diverting Customs Union . (10points)Give explanations according to the figure (one question, 10 points)Question: what does this figure illustrate? Offer as much information as possible you can learn from the figure.Draw figures and answer questions (12 points)On the left set of axes, sketch a community indifference curve tangent to the fairly flat section of a concave production frontier. On the right set of axes, sketch another (different) community indifferent curve tangent to the fairly steep portion of another (different) concave production frontier. On the graphs, show, for each nation with trade, the direction (by an arrow on the production frontier) of specialization in production and the equilibrium point of production and consumption.(a) Which is the commodity of comparative advantage for each nation?(b)Under what (unusual) condition would there be no such thing as comparative advantage or disadvantage between the two nation?(c) Explain, for each nation with trade, the equilibrium point of production and consumption. (d) How much does each nation gain in consumption compared with its autarky point?O X Y O YX。
国际经济学练习题(英文版)
Chapter 7: Economies of Scale, Imperfect Competition, and International Trade1. External economies of scale arise when the cost per unitA. rises as the industry grows larger.B. falls as the industry grows larger rises as the average firm grows larger.C. falls as the average firm grows larger.D. remains constant.E. None of the above.2. Internal economies of scale arise when the cost per unitA. rises as the industry grows larger.B. falls as the industry grows larger.C. rises as the average firm grows larger.D. falls as the average firm grows larger.E. None of the above.3. External economies of scaleA. may be associated with a perfectly competitive industry.B. cannot be associated with a perfectly competitive industry.C. tends to result in one huge monopoly.D. tends to result in large profits for each firm.E. None of the above.4. Internal economies of scaleA. may be associated with a perfectly competitive industry.B. cannot be associated with a perfectly competitive industry.C. are associated only with sophisticated products such as aircraft.D. cannot form the basis for international trade .E. None of the above.5. A monopolistic firmA. can sell as much as it wants for any price it determines in the market.B. cannot determine the price, which is determined by consumer demand.C. will never sell a product whose demand is inelastic at the quantity sold.D. cannot sell additional quantity unless it raises the price on each unit.E. None of the above.6. Monopolistic competition is associated withA. cut-throat price competition.B. product differentiation.C. explicit consideration at firm level of the feedback effects of other firms' pricing decisions.D. high profit margins.E. None of the above.7. The most common market structure isA. perfect competition.B. monopolistic competition.C. small-group oligopoly.D. perfectly vertical integration.E. None of the above.8. Modeling trade in monopolistic industries is problematic becauseA. there is no one generally accepted model of oligopoly behavior.B. there are no models of oligopoly behavior.C. it is difficult to find an oligopoly in the real world.D. collusion among oligopolists makes usable data rare.E. None of the above.9. Where there are economies of scale, the scale of production possible in a country is constrained byA. the size of the country.B. the size of the trading partner's country.C. the size of the domestic market.D. the size of the domestic plus the foreign market.E. None of the above.10. Where there are economies of scale, an increase in the size of the market willA. increase the number of firms and raise the price per unit.B. decrease the number of firms and raise the price per unit.C. increase the number of firms and lower the price per unit.D. decrease the number of firms and lower the price per unit.E. None of the above.11. The simultaneous export and import of widgets by the United States is an example ofA. increasing returns to scale.B. imperfect competition.C. intra-industry trade.D. inter-industry trade.E. None of the above.12. If output more than doubles when all inputs are doubled, production is said to occur under conditions ofA. increasing returns to scale.B. imperfect competition.C. intra-industry trade.D. inter-industry trade.E. None of the above.13. Intra-industry trade can be explained in part byA. transportation costs within and between countries.B. problems of data aggregation and categorization.C. increasing returns to scale.D. All of the above.E. None of the above.14. If some industries exhibit internal (firm specific) increasing returns to scale in each country, we should not expect to seeA. intra-industry trade between countries.B. perfect competition in these industries.C. inter-industry trade between countries.D. high levels of specialization in both countries.E. None of the above.15. Intra-industry trade is most common in the trade patterns ofA. developing countries of Asia and Africa.B. industrial countries of Western Europe.C. all countries.D. North-South trade.E. None of the above.16. International trade based on scale economies is likely to be associated withA. Ricardian comparative advantage.B. comparative advantage associated with Heckscher-Ohlin factor-proportions.C. comparative advantage based on quality and service.D. comparative advantage based on diminishing returns.E. None of the above.17. International trade based on external scale economies in both countries is likely to be carried out by aA. relatively large number of price competing firms.B. relatively small number of price competing firms.C. relatively small number of competing oligopolists.D. monopoly firms in each country/industry.E. None of the above.18. International trade based solely on internal scale economies in both countries is likely to be carried out by aA. relatively large number of price competing firms.B. relatively small number of price competing firms.C. relatively small number of competing oligopolists.D. monopoly firms in each country/industry.E. None of the above.19. A monopoly firm engaged in international trade willA. equate average to local costs.B. equate marginal costs with foreign marginal revenues.C. equate marginal costs with the highest price the market will bear.D. equate marginal costs with marginal revenues in both domestic and in foreign markets.E. None of the above.20. A monopoly firm will maximize profits byA. charging the same price in domestic and in foreign markets.B. producing where the marginal revenue is higher in foreign markets.C. producing where the marginal revenue is higher in the domestic market.D. equating the marginal revenues in domestic and foreign markets.E. None of the above.21. A firm in monopolistic competitionA. earns positive monopoly profits because each sells a differentiated product.B. earns positive oligopoly profits because each firm sells a differentiated product.C. earns zero economic profits because it is in perfectly or pure competition.D. earns zero economic profits because of free entry.E. None of the above.22. The larger the number of firms in a monopolistic competition situation,A. the larger are that country's exports.B. the higher is the price charged.C. the fewer varieties are sold.D. the lower is the price charged.E. None of the above.23. The monopolistic competition model is one in which there is/areA. a monopoly.B. perfect competition.C. economies of scale.D. government intervention in the market.E. None of the above.24. In industries in which there are scale economies, the variety of goods that a country can produce is constrained byA. the size of the labor force.B. anti-trust legislationC. the size of the market.D. the fixed cost.25. An industry is characterized by scale economies, and exists in two countries. Should these two countries engage in trade such that the combined market is supplied by one country's industry, thenA. consumers in both countries would suffer higher prices and fewer varieties.B. consumers in the importing country would suffer higher prices and fewer varieties.C. consumers in the exporting country would suffer higher prices and fewer varieties.D. consumers in both countries would enjoy fewer varieties available but lower prices.E. None of the above.26. An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice,A. each country's marginal cost must equal that of the other country.B. the marginal cost of this industry must equal marginal revenue in the other.C. the monopoly must lower prices in order to sell more.D. the two countries must engage in international trade one with the other.E. None of the above.27. A product is produced in a monopolistically competitive industry with scale economies. If this industry exists in two countries, and these two countries engage in trade one with the other, then we would expectA. the country in which the price of the product is lower will export the product.B. the country with a relative abundance of the factor of production in which production of the product is intensive will export this product.C. each of the countries will export different varieties of the product to the other.D. neither country will export this product since there is no comparative advantage.E. None of the above.28. The reason why one country may export a product which is produced with positive scale economies isA. its labor productivity will tend to be higher.B. it enjoys a relative abundance of the factor intensely used in the product's production.C. its demand is biased in favor of the product.D. its demand is biased against the product.E. None of the above.29. Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged inA. monopolistic competition.B. inter-industry trade.C. intra-industry trade.D. Heckscher-Ohlin trade.30. Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged inA. price competition.B. inter-industry trade.C. intra-industry trade.D. Heckscher-Ohlinean trade.E. None of the above.31. History and accident determine the details of trade involvingA. Ricardian and Classical comparative advantage.B. Heckscher-Ohlin model consideration.C. taste reversals.D. scale economies.E. None of the above.32. We often observe intra-industry North-South trade in "computers and related devices." This is due toA. classification and aggregation ambiguities.B. monopolistic competition.C. specific factors issues.D. scale economies.E. None of the above.33. We often observe "pseudo-intra-industry trade" between the United States and Mexico. Actually, such trade is consistent withA. oligopolistic markets.B. comparative advantage associated with Heckscher-Ohlin model.C. optimal tariff issues.D. huge sucking sound.E. None of the above.34. Intra-industry trade will tend to dominate trade flows when which of the following exists?A. Large differences between relative country factor availabilitiesB. Small differences between relative country factor availabilitiesC. Homogeneous products that cannot be differentiatedD. Constant cost industriesE. None of the above.35. The most common form of price discrimination in international trade isA. non-tariff barriers.B. Voluntary Export Restraints.C. dumping.D. preferential trade arrangements.E. None of the above.Essay Questions1. Why is it that an industry is operating under conditions of domestic internal scale economies (applies to firm in the country) - then the resultant equilibrium cannot be consistent with the pure competition model?2. Is it possible that if positive scale economies characterize an industry, that its equilibrium may be consistent with purely competitive conditions ? Explain how this could happen.3. If a scale economy is the dominant technological factor defining or establishing comparative advantage, then the underlying facts explaining why a particular country dominates world markets in some product may be pure chance, or historical accident. Explain, and compare this with the answer you would give for the Heckscher-Ohlin model of comparative advantage.4. It is possible that trade based on external scale economies may leave a country worse off than it would have been without trade. Explain how this could happen.5. If scale economies were not only external to firms, but were also external to individual countries. That is, the larger the worldwide industry (regardless of where firms or plants are located), the cheaper would be the per-unit cost of production. Describe what world trade would look like in this case.Quantitative/Graphing Problems1. The figure above represents the demand and cost functions facing a Brazilian Steel producing monopolist. If it were unable to export, and was constrained by its domestic market, what quantity would it sell at what price?2. Now the monopolist discovers that it can export as much as it likes of its steel at the world price of $5/ton. It will therefore expand for- export production up to the point where its marginal cost equals $5. How much steel will the monopolist sell, and at what price?3. Given the opportunity to sell at world prices, the marginal (opportunity) cost of selling a ton domestically is what?4. While selling exports it would also maximize its domestic sales by equating its marginal (opportunity) cost to its marginal revenue of $5. How much steel would the firm sell domestically, and at what price?5. The Brazilian firm is charging its foreign (U.S.) customers one half the price it is charging its domestic customers. Is this good or bad for the real income or economic welfare of the United States? Is the Brazilian firm engaged in dumping? Is this predatory behavior on the part of the Brazilian steel company?。
厦门大学《国际经济学》国际经济学期中考试1-英文.doc
Mid-term Examination for International EconomicsLMultiple choices: 30%1.Mercantilists believedA.That trade can only benefit a country at the expense of all other countries・B.That maintaining a balance of trade surplus was best.ernment should have no control over trade.D.Amassing large quantities of gold and silver were damaging to the health of a country.2.Specialization in production is ______ with _______ ・A.Incomplete; constant costsB.Incomplete; increasing costsC.Variable; constant costsplete; increasing costs3.China is relatively labor-abundant and Australia is relatively land-abundant. Textiles are relatively more labor-intensive than the production of wool According to Hcckschcr-Ohlin (H-O) theory, Australia will have:A.A comparative advantage in textiles. B・ An absolute advantage in textiles.C.A comparative advantage in wool.D. An absolute advantage in wool.4.Considering a world economy with two goods, two countries・ Suppose country 1 specializes in and exports commodity x in exchange of commodity y. Which of the following is the possible basis for international trade according the absolute advantage theory ?A.The unit labor requirment in x production is less in Country 2 than that in Country 1 ・B.The relative price of x in Country 1 exceeds the relative price of x in country 1C・ Country 1 can produce a unit of x with less labor than country 2D.All of the above.5.Which of the following is not the assumption generally used in the study of classical intcrnational trade theory?A.perfect competitionB.difference in factor endowmentplete specializationD.pefect intemaional moility of factors6.Gains from trade can be demonstrated in the neoclassical model by noting thatA.trade leads to specializationB.trade brings out diversity in consumptionC.trade results in more consumption above the production possbility frontierD.trade allows a country to learn new technology7.Which of the following is not long-run results of free trade:modity prices equalize between countries.B.Countries specialize more・C.One country gains while the other loses・D.Factor prices equalize between countries・8.In a labor-abundant country:A.Wage rates will fall with the opening of free trade・B.Wage rates will rise with the opening of fi-ee trade.C・ Wage rates will stay the same with the opening of free trade.D・ The change of wage rates is ambiguous・9. Which of the following would be winners when trade breaks out in a land abundant country:ndownersB. workersC. capital owners D・ all of them10.If the U.S. has a comparative advantage in the production of corn (land-intensive, and has a comparative disadvantage in the production of textiles (labor-intensive., in the short-mn, landowners in which sectors would gain?A. cornB. textilesC. bothD. neither11 ・Before trade, Australia is relatively abundant in capital and China is relatively abundant in labor. We would expect that the incomes of ________ in China and of _________ in Australia would increase・12.Heckscher-Ohlin theory can also be called:A.The theory of comparative advantage・B・ Factor-endowment theory.C・ The theory of absolute advantage・ D. The factor-proportions theory.13.Gains from trade can be broken down into two components:A.From exchange;from spccializationB.From specialization; from progress in producitivityC.From the technology change;from specializationD・ From factor transition; from exchange14.Which of the following is one of the assumptions of the H-O Model?A.Nations use diffcrcncc tech no logy in productionB.Both commodities are produced under increasing returns to scaleC.Tastes are equal in both nationsD・ There is imperfect factor mobility within each nation and no international factor mobility15.Equilibrium Relative Commodity Price with trade detennined byA.Mutual demand and supply in the world marketB.Trade neogiation between the two countriesC.The international unit labor requirments of the commodityD.The management by both governments16.Which of the following can lead to international tradeA.diffcrcnccs in taste B・ differences in resourcesC・ differences in productivity D. all of the above17.The Leontief Paradox found fault with:A.The theory of absolute advantage・B. The theory of comparative advantage・C.Heckschcr・Ohlin (H-O) theory.D. The Factor Price Equalization theorem.18.IfY production uses 80 workers and 200 units of capital, while X production uses 20 workers and 20 units of capital, thenA.Y production is Capital intensiveB.X production is Capital intensiveC.If country 1 is labor aboundant, she should specialize in and export X.D.All of the above are false.19.In a specific factors model, the increase of price of manufocturcs will not leads tobor shifts from the food sector to the manufacturing sectorB.output of manufactures rises while that of food falls.C.Workers are definitely better offD.The wage rate rises in both sectors.20.Only doubling labor with trade in a large labor-abundant country _____ ・A. deteriorate the country's terms of trade B・ can increase or reduces the volume of tradeC.reduces the country's social welfareD.all of the above・2 l.The Rybczynski theorem postulates that doubling labor at constant relative commodity price _____ ・A.doubles the output of the labor-intensive commodityB.reduces the output of the capital-intensive commodityC.keeps the output of the capital-intensive commodity unchanged23. A monopoly firm engaged in international trade will _____ . A. equate average to local costsB. equate marginal costs with foreign marginal revenuesC. equate marginal costs with the highest price the market will bearD. equate marginal costs with marginal revenues in both domestic and foreign markets.24.If some industries exhibit internal increasing returns to scale in each country, wc should NOT expect to see ______ ・A. intra-industiy trade between countriesB.perfect competition in these industriesC.interindustry trade between countriesD.high levels of specialization in both countries25.In the domestic monopolistically competitive market, as the number of varieties increases, the price ________ and the unit cost26.A product is produced in a monopolistically competitive industry with scale economies ・ If this industry exists in two countries, and these two countries engage in trade one with the other, we would expectA. the country in which the price of the product is lower will export the product.B. thc country with a relative abundance of the factor of production in which production ofC. the product is intensive will export this product.D. each of the countries will export different varieties of the product to the other.27.International trade based on internal scale economies in both countries is likely to be carried out by a ______ ・A. relatively large number of price competing firmsB. relative small number of price competing firmsC. relative small number of competing oligopolistsD. monopoly firms in each country/industry.28. Which of the following is not correct about the intraindustry trade and intraindustry trade:A The basis for trade in interindustiy trade is comparative advantage, and that in intraindustry trade is not comparative advantageB The pattern of inteeindustry trade itself is unpredictable, and the pattern of interindustry can be predicted through the pretrade relative price of commodites.C If Home and Foreign are similar, there will be more interindustry trade ・D Intraindustry trade can make all factors better off.29. Which of the following factors would NOT be likely to contribute to a worsening of the terms of trade of developing countries?A. Heavy reliance on primary production exports ・B. The differing price effects of technological change compared to developed countries ・C. Developing countries' attempts to diversify their exports and include more manufactured goods in their export commoditiesD. Differences in the demand characteristics of the developing countries' exports and imports.30. Assume a country that produces cloth and coal. Assume that cloth production requires significant amounts of labor and capital, but relatively little land. Assume that coal production requires relatively little labor and capital, but relatively large amounts of coal-rich land. Given increases in the country's endowments of capital and labor, we can expect thatA. both cloth and coal production will in crease ・A.increases; increasesB. increases; decreasesC. decreases; increasesD.decreases; decreases D.any of the above.B.cloth production will increase, but coal production will remain constant.C.coal production will increase, but cloth production will remain constant.D.cloth production will increase, but coal production will decline・II.True or False:10%31.To increase one country's wealth, the country must sell more to strangers than consume of theirs in value yearly.32.If one nation is less efficient than the other country in the production of both commodities, there is not a basis for mutuallybeneficial trade・33.The Ricardian model explains why abosulute advantage is not nessecarily for international trade.34.Countrics A and B have two factors of production, capital and labor, with which they produce two goods, X and Y.Technology is the same in the two countries・ Good X is capital intensive; Country A is capital abundant. An increase in A's labor induces an increase in B、s terms of trade・35.Increasing opportunity cost arise when resources are perfect substitutes for each other or used in fixed proportion in theproduction.36.Small Country have no effects on the relative price on the world market37.The Heckscher-Ohlin model with two factors of production, labor and capital, shows that free trade between the US andMexico would lower US wages to the level of Mexican wages that prevails prior to the opening to trade・3& In a specific factors model, where labor is the mobile factor, trade is beneficial for the workers of the export secto匚39.Foreign competition is unfair and hurts other countries when it is based on low wages・40.Free trade is beneficial only for strong economics・III.Essay questions: 20%41.Consider an economy where the factors of production are labor (mobile) and capital (sector-specific in the Specific Factors model and mobile in the Heckscher-Ohlin model). Contrast the welfare effect of trade on the capital owners in the Specific Factors and the Hcckschcr-Ohlin models.42.What is the Leontief Paradox? Give two explanations to it.43.Many theoretical trade models assume that all goods are perfect substitutes and that all goods are traded・ There are also many models that specify the existence of non-lraded goods or that traded goods are imperfect substitutes. What are the implications for the H・O model with non-traded goods and/or goods that are imperfect substitutes?IV.Graphic problems or quantitative problems: 40%44.Specific model. Suppose that the United States produces only food and manufactures. Land is a specific factor input in food production and capital is a specific factor input in manufactures while labor is freely allocated across both sectors of the economy. All of a sudden, agricultural policy in the European Union induces an increase in the world food supply and reduces the international price of food. Illustrate the impact of the reduction in the price of food on the US labor demand curves for food and manufactures. What is the impact on labor allocation in the US and what is the impact on the wage rate? 45. Ricardian model. Suppose the unit labor requirements (the number of hours of labor required to produce one unit commodity) for country I and 2 are the following:Country 1 Country 2corn 2 20banana 6 48tomato 5 20apples 7 20wheat 12 645.1Suppose that all residents in both countries merely consume tomato and wheat. Then which goods will country Aproduce and export? Which goods will country B produce and export?45.2This problem is based on 29」・Suppose that every country has 120 hours of labors・ Prove that each country canbenefit from trade under such assumptions・45.3If the wage rate in A is five times that of B, which goods will country A export? which goods will country B export?46. A free-trade equilibrium exists in a two-region, two-product world. The United States trade with the Rest-of^the-World,exporting manufacturing and importing energy. Suppose that environmental consciousness has reduced the demand for energy in the US.46.1.At given international price, what is the effect in the US of this change in demand on the desired levels of imports andof exports?46.2.Illustrate this result on a graph showing the inipact of this decline in the demand for energy on the US offer curve ・46.3Assume that the United States is large enough to influence international prices, show on the previous graph how thisreduction in the demand for energy in the US affects the equilibrium international price ratio and volume of trade.46.4Show on a PPF graph and explain the eftect of this change in the terms of trade in the Rest of the World on Rest of theWorld's welfare・47. Monopolistic competition and international trade・Imagine an industry consisting of a number of firms producingdifferentiated products. The particular equation for the demand and the for the cost facing a firm are:Q = S X [1/n-b X (P — P*)]AC = F/Q + cwhere:Q is the firm's sales, S is the total sales of the industry, n is the number of firms in the industry, b is a constant term representing the responsiveness of a firm's sales to its price, P is the price charged by the firm itself, and P* is the average price charged by other competitors・Assume the following: b = 1/30000, F = $750,000,000, c = $5000 .And assume there are two countries (Home and Foreign) that have the same costs of automobile production. Annual sales of automobiles are 1600 million at Home and 4900 million at Foreign.47.1Show the equilibrium price and numbers of firms of Home and Foreign in the absence of trade.47.2Show the equilibrium price and numbers of firms of Home and Foreign in open economies・一.单项选择:BBCCDCCBABBDACADCACABBDBCDDCCD二.判断对错xxppx xpxxx三.简答1.7分要点：1)特定要素模型中的资本属于特定要素，在国际贸易后，资本柑对丰裕的国家出口特定被特定使用的产品，并从中获益；反Z，资本相对稀缺的国家资本受损。
国际经济学英文版选择题
练习题二： Part A: Multiple ChoiceDADCC BACDB DD1. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ inA) tastes.B) military capabilities.C) size.D) relative availabilities of factors of production.E) labor productivities.2.The slope of a countryʹs PPF reflectsA) the opportunity cost of product S in terms of product T.B) the opportunity cost of T in terms of money prices.C) the opportunity cost of S or T in terms of S.D) Both A and B.E) Both A and C.3. According to the Heckscher-Ohlin model, the source of comparative advantage is a countryʹsA) Technology.B) advertising.C) human capital.D) factor endowments.E) Both A and B.4. If Australia has relatively more land per worker, and Belgium has relatively m ore capital per worker, then if trade were to open up between these two countries,A) the relative price of the capital-intensive product would rise in Australia.B) the world price of the land-intensive product would be higher than it had been in Belgium.C) the world price of the land intensive product would be higher than it had been in Australia.D) the relative price of the land intensive product would rise in Belgium.E) None of the above.5. The Heckscher-Ohlin model predicts all of the following exceptA) which country will export which product.B) which factor of production within each country will gain from trade.C) the volume of trade.D) that wages will tend to become equal in both trading countries.E) None of the above.6. External economies of scale arise when the cost per unitA) rises as the industry grows larger.B) falls as the industry grows larger rises as the average firm grows larger.C) falls as the average firm grows larger.D) remains constant.E) None of the above.7. External economies of scaleA) may be associated with a perfectly competitive industry.B) cannot be associated with a perfectly competitive industry.C) tends to result in one huge monopoly.D) tends to result in large profits for each firm.E) None of the above.8. The simultaneous export and import of widgets by the United States is an exa mple ofA) increasing returns to scale.B)B) imperfect competition.C) intra-industry trade.D) inter-industry trade.E) None of the above.9. Intra-industry trade can be explained in part byA) transportation costs within and between countries.B) problems of data aggregation and categorization.C) increasing returns to scale.D) All of the above.E) None of the above.10. Intra-industry trade will tend to dominate trade flows when which of the follo wing exists?A) large differences between relative country factor availabilitiesB) small differences between relative country factor availabilitiesC) homogeneous products that cannot be differentiatedD) constant cost industriesE) None of the above.11. The larger the number of firms in a monopolistic competition situation,A) the larger are that countryʹs exports.B) the higher is the price charged.C) the fewer varieties are sold.D) the lower is the price charged.E) None of the above.12. The larger the number of firms in a monopolistic competition situation,A) the larger are that countryʹs exports.B) the higher is the price charged.C) the fewer varieties are sold.D) the lower is the price charged.E) None of the above.Part B： Short Questions1. ʹThe H.O. model remains useful as a way to predict the income distribution effect s of trade.ʹ Discuss.Answer: T he Stolper-Samuelson theorem, one of the basic theorems arising from theHeckscher-Ohlin model yields an elegant demonstration of the fact that changes i n product prices (such as will occur when trade is expanded or curtailed) telescop es its effects onto factor prices, so that not only do relative factor returns mirror product prices, but that actual returns to factors may either rise or fall in real ter ms. Hence, as a policy framework, the disproportionate effect trade may have on real incomes of sectors, such as skilled-labor is quite useful both theoretically and practically (or polemically)2. International trade leads to complete equalization of factor prices. Discuss. This statement is typically ʹtrue . . . but.ʹ Under a strict and limited set of assumptions, such as the original Heckscher-O hlin model which excludes country specific technologies; non- homothetic tastes; factor intensity reversals; large country differences in (relative) factor abundance s, more factors than goods, and an equilibrium solution within the ʹcone of specializationʹ; then it may bedemonstrated that internal consistency demands that the above stated sentence isʹtrue.ʹ However, the minute one relaxes any of the above listed assumptions one may ea sily identify solutions, which contradict the factor price equalization theorem.3. If a scale economy is the dominant technological factor defining or establishing comparativeadvantage, then the underlying facts explaining why a particular country domina tes world markets in some product may be pure chance, or historical accident. E xplain, and compare this with the answer you would give for the Heckscher-Ohli n model of comparative advantage.T his statement is true, since the reason the seller is a monopolist may be that it happened to have been the first to produce this product in this country. It may ha ve no connection to any supply or demand related factors; nor to any natural or man-made availability. This is all exactly the opposite of the Heckscher-Ohlin Ne o-Classical modelʹs explanation of the determinants of comparative advantage.练习题三 Part A Multiple ChoiceB E D D A D A A AC C A BD D1) International borrowing and lending may be interpreted as one form ofA) intermediate trade.B) inter-temporal trade.C) trade in services.D) unrequited international transfers.E) None of the above.2) International free labor mobility will under all circumstancesA) increase total world output.B) improve the economic welfare of everyone.C) improve the economic welfare of workers everywhere.D) improve the economic welfare of landlords (or capital owners) everywhere.E) None of the above.3) International labor mobilityA) leads to wage convergence by raising wages in destination country and lowering in source country.B) is in accordance with the specific factors model.C) is in accordance with the Heckscher-Ohlin factor proportions model.D) leads to wage convergence by raising wages in source and lowering them in destin ation country.E) is in accordance with scale economy model.4) If initially wages are higher in Home than in Foreign, then a movement of wor kers from Foreign to Home willA) lower the marginal product of labor in Foreign.B) raise total product in Foreign.C) raise the income of land owners in Foreign.D) raise the income of land owners in Home.E) None of the above.5) A country that has a comparative advantage in future production of consumpti on goodsA) will tend to be an international borrower.B) will tend to have low real interest rates.C) will tend to be an international investor or lender.D) will tend to have good work ethics. E) None of the above.6) Why a good is produced in two different countries is known as the question ofA) internalization.B) vertical integration.C) exploitation.D) location.E) None of the above.7) Direct foreign investment may take any of the following forms exceptA) investors buying bonds of an existing firm overseas.B) the creation of a wholly owned business overseas.C) the takeover of an existing company overseas.D) the construction of a manufacturing plant overseas.E) None of the above.8) Multinational corporationsA) increase the transfer of technology between nations.B) make it harder for nations to foster activities of comparative advantage.C) always enjoy political harmony in host countries in which their subsidiaries operat e.D) require governmental subsidies in order to conduct worldwide operations.E) None of the above.9) The shift of labor-intensive assembly operations from the United States to Mex ican maqiladora may be best explained in terms of a theory ofA) location.B) vertical integration.C) horizontal integration.D) internalization.E) None of the above.10) A lower tariff on imported steel would most likely benefitA)foreign producers at the expense of domestic consumers.B) domestic manufacturers of steel.C) domestic consumers of steel.D) workers in the steel industry.E) None of the above.11) In the country levying the tariff, the tariff willA) increase both consumer and producer surplus.B) decrease both the consumer and producer surplus.C) decrease consumer surplus and increase producer surplus.D) increase consumer surplus and decrease producer surplus.E) None of the above.12) If the tariff on computers is not changed, but domestic computer producers s hift from domestically produced semiconductors to imported components, then the effective rate of protection in the computer industry willA) increase.B) decreaseC) remain the same.D)depend on whether computers are PCs or ʺSupercomputers.ʺE) None of the above.13) If a small country imposes a tariff, thenA）the producers must suffer a loss.B) the consumers must suffer a loss.C) the government revenue must suffer a loss. D) the demand curve must shift to the l eft.E) None of the above.14) The effective rate of protection measuresA)the ʺtrueʺ ad valorum value of a tariff.B) the quota equivalent value of a tariff.C) the efficiency with which the tariff is collected at the customhouse.D) the protection given by the tariff to domestic value added.E) None of the above.15) As globalization tends to increase the proportion of imported inputs relative t o domestically supplied components,A) the nominal tariff automatically increases.B) the rate of (effective) protection automatically decreases.C) the nominal tariff automatically decreases.D) the rate of (effective) protection automatically increases. E) None of the above. PART B Short Question 1.It has been argued that even if intra-European Union labor mobility were to be c ompletely removed, one should not expect to observe massive, or even large reall ocations of populations with the E.U. Discuss.T heoretically, just as completely free trade consistent with Heckscher-Ohlin model (with no complete specialization) is associated with factor price equalizatio n; so does completely free labor mobility. It therefore follows that if intra E.U. tra de flourishes, as any restraints on trade there are abolished, the economic incenti ve for labor mobility will be removed. Since language and cultural differences re main, we would expect populations to tend to stay where they are.2. The two deadweight triangles are the Consumption distortion and Production distortion losses. It is easy to understand why the Consumption distortion constit utes a loss for society. After all it raises the prices of goods to consumers, and eve n causes some consumers to drop out of the market altogether. It seems paradoxi cal that the Production distortion is considered an equivalent burden on society. After all, in this case, profits increase, and additional production (with its associa ted employment) comes on line. This would seem to be an offset rather than an addition to the burden or loss borne by society. Explain why the Production distor tion is indeed a loss to society, and what is wrong with the logic that leads to the a pparent paradox.T he Production Distortion represents an inefficient shift of societyʺs resources to produce a good, which it could not sell profitably at world prices. S ince (with full employment assumed) these resources were formerly used to prod uce export goods, which could compete profitably, the net result is a loss in real i ncome to the country.练习题五：A E C A D C D D E D A D 1．Which of the following statements is the most accurate? The law of one price states:A) in competitive markets free of transportation costs and official barrier to trade, iden tical goods sold in different countries must sell for the same price when their prices ar e expressed in terms of the same currency.B) in competitive markets free of transportation costs and official barrier to trade, iden tical goods sold in the same country must sell for the same price when their prices are expressed in terms of the same currency.C) in competitive markets free of transportation costs and official barrier to trade, iden tical goods sold in different countries must sell for the same price.D) identical goods sold in different countries must sell for the same price when their p rices are expressed in terms of the same currency.E) None of the above.2. In order for the condition E$/HK$ = Pus/PHK to hold, what assumptions does the principle of purchasing power parity make?A) No transportation costs and restrictions on trade; commodity baskets that are a reli able indication of price level.B) Markets are perfectly competitive, i.e., P = MC.C) The factors of production are identical between countries.D) No arbitrage exists. E) A and B.3. Under Purchasing Power Parity,A) E$/E = PiUS/PiE.B) E$/E = PiE/PiUS.C) E$/E = PUS/PE.D) E$/E = PE/PES.E) None of the above.4. In the short run,A) the interest rate can rise when the domestic money supply falls.B) the interest rate can decrease when the domestic money supply falls.C) the interest rate stays constant when the domestic money supply falls.D) the interest rate rises in the same proportion as the domestic money supply falls.E) None of the above.5. The PPP theory fails in reality becauseA) transport costs and restrictions on trade.B) monopolistic or oligopolistic practices in goods markets.C) the inflation data reported in different countries are based on different commodity baskets.D) A, B, and C.E) A and B only.6. The PPP theory fails in reality becauseA) transport costs and restrictions on trade.B) monopolistic or oligopolistic practices in goods markets.C) the inflation data reported in different countries are based on different commodity baskets.D) A, B, and C.E) A and B only.7. A countryʹs domestic currencyʹs real exchange rate, q, is defined asA) E.B) E times P.C) E times P.D) (E times P)/P.E) P/(E times P).8. In the short-run, any fall in EP/P, regardless of its causes, will causeA) an upward shift in the aggregate demand function and an expansion of outputB) an upward shift in the aggregate demand function and a reduction in outputC) a downward shift in the aggregate demand function and an expansion of outputD) an downward shift in the aggregate demand function and a reduction in outputE) an upward shift in the aggregate demand function but leaves output intact9. In the short-run, a temporary increase in money supplyA) shifts the DD curve to the right, increases output and appreciates the currency.B) shifts the AA curve to the left, increases output and depreciates the currency.C) shifts the AA curve to the left, decreases output and depreciates the currency.D) shifts the AA curve to the left, increases output and appreciates the currency.E) shifts the AA curve to the right, increases output and depreciates the currency.10. Temporary tax cuts would cause:A) the AA-curve to shift left.B) the AA-curve to shift right.C) the DD-curve to shift left.D) the DD-curve to shift right.E) a shift in the AA-curve, although the direction is ambiguous.11. In the short-run, a temporary increase in the money supplyA) shifts the AA curve to the right, increases output and depreciates the currency.B) shifts the AA curve to the left, increases output and depreciates the currency.C) shifts the AA curve to the left, decreases output and depreciates the currency.D) shifts the AA curve to the left, increases output and appreciates the currency.E) shifts the AA curve to the right, increases output and appreciates the currency.12. Assume the asset market is always in equilibrium. Therefore a fall in Y would result in:A) higher inflation abroad.B) a decreased demand for domestic products.C) a contraction of the money supply.D) a depreciation of the home currency.E) an appreciation of the home currency.13. What can explain the failure of relative PPP to hold in reality?Government measures of the price level differ from country to country. One reason f or these differences is that people living in different countries spend their income in di fferent ways. Because of this inherent difference among countries, certain baskets will be affected more by price changes given their consumptions basket. For example, con sumers in country, X, eats more fish relative to another country. More than likely, the government, upon determining a commodity basket to reflect preference, will have an overwhelming representation of fish in their basket. Any price level change in the fish market will be felt particularly by country X, and their overall price level will reflect t his. Thus, changes in the relative prices of basket components can cause relative PPP t o become distorted.14. Using a figure show that under full employment, a temporary fiscal expansion wo uld increase output (overemployment) but cannot increase output in the long run.A temporarily fiscal expansion will move the economy from DD1 to DD2, and outp ut increases. A permanent fiscal expansion will also shift the AA curve to the left and down. The nominal exchange rate appreciates, i.e. E decreases.15. Using the DD model, explain what happens to out put when Government demands increase. Use a figure to explain when it is taking place.T he figure below shows the G1 to G2 raises output at every level of the exchange rate . The change shifts the DD to the right. Which in turns increases output to Y2.[文档可能无法思考全面，请浏览后下载，另外祝您生活愉快，工作顺利，万事如意!]。
monopolistic
Introduction
• Monopolistic competition is a market structure in which there are many firms selling differentiated products. • There are few barriers to entry.
Four distinguishing characteristics:
1. Many sellers that do not take into account rivals’ reactions 2. Product differentiation where the goods that are sold aren’t homogenous
Introduction
• Oligopoly is a market structure in which there are a few interdependent firms. • There are often significant barriers to entry.
Characteristics of Monopolistic Competition
Multiple Dimensions of Competition
• One dimension of competition is product differentiation. • Another is competing on perceived quality. • Competitive advertising is another. • Others include service and distribution outlets.
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Chapter 16Monopolistic CompetitionTRUE/FALSE1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in themarket.ANS: T DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Interpretive2. The "monopoly" in monopolistically competitive markets is most likely a result of firms having some pricingpower due to product differentiation.ANS: T DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Interpretive3. Monopolistic competition is characterized by many buyers and sellers, product differentiation, and free entry. ANS: T DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional4. Monopolistic competition is characterized by many buyers and sellers, product differentiation, and barriers toentry.ANS: F DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional5. A monopolistically competitive market is characterized by barriers to entry.ANS: F DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Interpretive6. Monopolistic competition is the only market structure that features many sellers.ANS: F DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Markets MSC: Interpretive7. Product differentiation always leads to some measure of market power.ANS: T DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Demand curveMSC: Interpretive8. Oligopoly is characterized by a few sellers offering similar products, whereas monopolistic competition ischaracterized by many sellers offering differentiated products.ANS: T DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional9. Monopolistic competition is characterized by a few sellers offering similar products, whereas oligopoly ischaracterized by many sellers offering differentiated products.ANS: F DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional10. Oligopoly and monopolistic competition are examples of a market structure called imperfect competition. ANS: T DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional1078Chapter 16/Monopolistic Competition 1079 11. Monopolistic competition and monopoly are examples of a market structure called imperfect competition. ANS: F DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional12. A markup of price over marginal cost is inconsistent with free entry and zero profit.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Interpretive13. Monopolistically competitive firms, like monopoly firms, maximize their profits by charging a price thatexceeds marginal cost.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Interpretive14. A profit-maximizing firm in a monopolistically competitive market charges a price equal to marginal cost. ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Interpretive15. A profit-maximizing firm in a monopolistically competitive market always operates on the downward-slopingportion of its marginal cost curve.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Analytical16. For a profit-maximizing firm in a monopolistically competitive market, when price is equal to average totalcost, price must lie above marginal cost.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Analytical17. A profit-maximizing firm in a monopolistically competitive market can earn positive, negative, or zero profitsin the short run.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Short-run equilibriumMSC: Interpretive18. A firm in a monopolistically competitive market can earn both short-run and long-run profits.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Short-run equilibrium | Long-run equilibriumMSC: Interpretive19. A firm in a monopolistically competitive market can earn short-run profits but not long-run profits.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Short-run equilibrium | Long-run equilibriumMSC: Interpretive20. In the long run, monopolistically competitive firms produce where demand equals marginal cost.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Long-run equilibriumMSC: Analytical21. When a firm in a monopolistically competitive market earns zero economic profit, its product price must equalmarginal cost.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Long-run equilibriumMSC: Interpretive1080 Chapter 16/Monopolistic Competition22. In the long run, monopolistically competitive firms produce where demand equals average total cost.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Long-run equilibriumMSC: Analytical23. In a monopolistically competitive market, the number of firms adjusts until economic profits are driven tozero.ANS: T DIF: 1 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Long-run equilibriumMSC: Interpretive24. When a profit-maximizing firm in a monopolistically competitive market is in long-run equilibrium, marginalcost must lie below average total cost.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Long-run equilibriumMSC: Analytical25. In a monopolistically competitive market, the demand curves faced by incumbent firms are unaffected by theentry of new firms into the market.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Demand curve | Long-run equilibriumMSC: Interpretive26. A firm in a monopolistically competitive market is usually indifferent to an additional customer walkingthrough the door, since a sale to that customer will not increase the firm's profit.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Profit maximizationMSC: Interpretive27. The term excess capacity refers to the fact that a firm operates on the upward-sloping portion of itsaverage-total-cost curve.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Excess capacityMSC: Interpretive28. The term excess capacity refers to the fact that a firm produces a lower quantity than it would if it operated atthe efficient scale.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Excess capacityMSC: Interpretive29. Excess capacity characterizes firms in monopolistically competitive markets, even in situations of long-runequilibrium.ANS: T DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Excess capacityMSC: Interpretive30. When a firm operates with excess capacity, it must be in a monopolistically competitive market.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Excess capacityMSC: Interpretive31. A firm that would experience higher average total cost by increasing production is operating with excesscapacity.ANS: F DIF: 2 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Excess capacityMSC: InterpretiveChapter 16/Monopolistic Competition 1081 32. When a firm operates at efficient scale, it is producing at the minimum point on its average total cost curve. ANS: T DIF: 1 REF: 16-2 NAT: AnalyticLOC: Monopolistic competition TOP: Efficient scaleMSC: Definitional33. Defenders of advertising argue that firms use advertising as a signal of quality, even if the advertising deliverslittle helpful information about the product.ANS: T DIF: 1 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Applicative34. Critics of advertising argue that advertising leads to less elastic demand for products and a larger markup ofprice over marginal cost.ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive35. The claim that advertising reduces the elasticity of demand is likely to be made by a defender of advertising. ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive36. Critics of advertising argue that firms use advertising to manipulate consumers’ tastes.ANS: T DIF: 1 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Applicative37. When advertising is used to relay information about price, each firm is able to enhance market power.ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive38. Policymakers have generally come to accept the view that advertising enhances the efficiency of markets. ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive39. Economists are unanimous in their belief that advertising is socially inefficient.ANS: F DIF: 1 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Definitional40. When McDonald’s opens a store in Dhaka, Ba ngladesh, it has a strong incentive to enforce product qualityconsistent with stores in the United States.ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive41. The Mikati Philippines Hard Rock Cafe has the exact same menu as the Hard Rock Cafe in New York. This isan example of a brand name enhancing market efficiency for U.S. tourists visiting the Philippines.ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive42. Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products. ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive43. Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signalsinferior product quality.ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive44. Advertising during the Super Bowl is an example of information about quality contained primarily in theexistence and expense of the advertising.ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive45. Brand names are rarely used to convey information about product quality.ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive1082 Chapter 16/Monopolistic Competition46. The government of Italy will not allow any Hard Rock Cafe restaurants to open in Italy. Defenders of theefficiency of brand-name markets would argue that this has hindered restaurant market efficiency in Italy. ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive47. The debate over whether advertising serves a valuable purpose in society is definitively answered byeconomists who study the tastes and preferences of individuals.ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive48. If advertising decreases the elasticity of demand for specific brand names of hard liquor, we would expectfirms to be able to charge a larger markup over marginal cost.ANS: T DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive49. There is general disagreement among economists about the role of advertising, but there is widespreadagreement about the role of brand names on market efficiency.ANS: F DIF: 2 REF: 16-3 NAT: AnalyticLOC: Monopolistic competition TOP: Advertising MSC: Interpretive50. The government may not be able to improve the inefficiencies of a monopolistically competitive market. ANS: T DIF: 2 REF: 16-4 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Interpretive51. Firms in monopolistically competitive markets and monopolies can earn long-run profits due to barriers toentry.ANS: F DIF: 2 REF: 16-4 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Interpretive52. Free entry eliminates long-run profits for firms in competitive and monopolistic industries.ANS: T DIF: 2 REF: 16-4 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: InterpretiveSHORT ANSWER1. List five goods that are likely sold in a monopolistically competitive market.ANS:Books, CDs, movies, computer games, and piano lessons are some examples.DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competitionTOP: Monopolistic competition MSC: Interpretive2. Why does a typical monopolistically competitive firm face a downward-sloping demand curve?ANS:Because its product is different from those offered by other firms.DIF: 1 REF: 16-1 NAT: Analytic LOC: Monopolistic competitionTOP: Demand curve MSC: Interpretive3. In many college towns, private independent bookstores typically locate on the periphery of the college campus.However, in some college towns, the university has used political power to restrict private bookstores near campus through community zoning laws. Use your knowledge of markets to predict the price and quality of service differences in the market for college textbooks under the two different market regimes.ANS:In monopoly markets, price will be higher and the quality of service will be lower than in monopolistically competitive markets.DIF: 2 REF: 16-1 NAT: Analytic LOC: Monopolistic competitionTOP: Monopolistic competition MSC: AnalyticalChapter 16/Monopolistic Competition 1083 4. Use a graph to demonstrate why a profit-maximizing monopolistically competitive firm must operate at excesscapacity. Explain why a perfectly competitive firm is not subject to the same constraint.ANS:Competitive firms do not face downward-sloping demand. The graph shows the firm choosing a level of production in which the intersection of marginal revenue and marginal cost occurs at an output level where average total cost is decreasing. This profit-maximizing output level is less than the efficient scale (minimum of average total cost), and therefore the firm is said to be operating with excess capacity.DIF: 2 REF: 16-2 NAT: Analytic LOC: Monopolistic competitionTOP: Excess capacity MSC: Analytical5. In a small college town, four microbreweries have opened in the last two years. Demonstrate the effect of newmarket entrants on demand for existing firms (microbreweries) that already served this market. Assume that the local community now places a moratorium on new liquor licenses for microbreweries. How will thismoratorium affect the long-run profitability of incumbent firms?ANS:The arrival of a new entrant should be graphically depicted by a leftward shift in the demand curves faced by all incumbent firms. If firms are able to make economic profits, these will be able to be maintained in the long run if new entrants are not allowed (which would essentially be a barrier to entry, meaning the market would no longer be characterized as monopolistically competitive).DIF: 2 REF: 16-2 NAT: Analytic LOC: Monopolistic competitionTOP: Long-run equilibrium MSC: Analytical1084 Chapter 16/Monopolistic Competition6. What is meant by the term "excess capacity" as it relates to monopolistically competitive firms?ANS:Monopolistically competitive firms produce a level of output lower than the efficient scale of output and are therefore said to have excess capacity.DIF: 2 REF: 16-2 NAT: Analytic LOC: Monopolistic competitionTOP: Excess capacity MSC: Interpretive7. Entry of firms in a monopolistically competitive industry is characterized by two externalities. List them andbriefly describe how consumers and existing firms are influenced by them.ANS:Business-stealing effect: incumbent firms are affected through the loss of sales; consumers are affected by lower price.Product-variety effect: incumbent firms face a market with more substitutes; consumers have more product variety from which to choose.DIF: 2 REF: 16-2 NAT: Analytic LOC: Monopolistic competitionTOP: Externalities MSC: Interpretive8. Evaluate the following statement in the context of business-stealing and product-variety externalities: "Wehave too many student apartments in this town already. Statistics show that vacancy rates average 15 percent during any given semester."ANS:Business-stealing effect: if new entrants into the market can be profitable, then average vacancy rates are likely to rise above 15 percent.Product-variety effect:if new entrants to the market are able to identify niche markets which are profitable (i.e., offer club rooms, pools, athletic facilities, etc.), then product variety will increase, and average vacancy rates are likely to rise above 15 percent.DIF: 2 REF: 16-2 NAT: Analytic LOC: Monopolistic competitionTOP: Externalities MSC: Interpretive9. Assume the role of a critic of advertising. Describe the characteristics of advertising that reduce theeffectiveness of markets and decrease the social welfare of society.ANS:Advertising manipulates people's tastes and is psychological rather than informational. As a result, advertising creates a desire for a product that might not otherwise exist. Advertising may also impede competition by convincing consumers that products that are identical have significant differences.DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Interpretive10. Assume the role of a defender of advertising. Describe the characteristics of advertising that enhance theeffectiveness of markets and increase the social welfare of society.ANS:Advertising provides information to consumers and thus allows consumers to make more informed (and therefore better) choices. Advertising fosters competition by making consumers more aware of prices and product characteristics in a market.DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Interpretive11. Evaluate the following statement: "Advertisements that use celebrity endorsements are devoid of any valueand do not enhance the efficient functioning of markets."ANS:Some people argue that celebrity endorsements are a signal of quality due to the high cost of the advertisement. If so, then these advertisements relay information about product quality and enhance the effective functioning of markets. DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: InterpretiveChapter 16/Monopolistic Competition 108512. Professional organizations (for example, the American Medical Association and the American Bar Association)have been active advocates for regulation to restrict the right of professionals to advertise. Describe whateconomic incentives might exist for existing professionals to restrict advertising.ANS:If advertising increases information about prices and services, then providers of professional services will berequired to compete with each other on the basis of price and service. As such, existing professionals will be subject to more competitive pressure in the markets they service, and individual profits are likely to fall.DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Analytical13. Discuss how brand names may enhance the efficiency of markets in a less developed country.ANS:Recognizable brand names signal quality products. In the tourist- and business-services market, this signal can be critical at the early stages of development to ensure visitors have a quality experience when other information isunavailable or unreliable.DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Interpretive14. As developing countries make a transition to market-based economies, one of the first major capitalinvestments is in "Western-quality" hotels. Explain why brand-name hotel accommodations are a critical stepin attracting foreign investment.ANS:Brand-name hotels are a critical first step to economic development because their recognized signal of qualityreduces the barriers of facilitating foreign visitors (and their money).DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Analytical15. In markets where the government imposes an excise tax on unit sales, it also has a tendency to dabble withrestrictions on advertising (for example, cigarettes and hard liquor). Do potential (or actual) restrictions onadvertising in these markets serve the interest of a government that is interested in maximizing its tax revenuefrom the sale of these products? Explain your answer.ANS:In the case of the examples given, demand is quite inelastic, so restrictions on advertising are not likely to have a large impact on total sales but may have an impact on the distribution of sales across brand names. As such,government revenue is largely unaffected if the tax is on unit sales.DIF: 3 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: AnalyticalSec 00 - Monopolistic CompetitionMULTIPLE CHOICE1. Which of the following is a characteristic of monopolistic competition?a.ownership of a key resource by a single firmb.free entryc.identical productd.patentsANS: B DIF: 1 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional1086 Chapter 16/Monopolistic Competition2. The market for novels isa.perfectly competitive.b. a monopoly.c.monopolistically competitive.d.an oligopoly.ANS: C DIF: 1 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Applicative3. Which of the following statements is not correct?a.Monopolistic competition is similar to monopoly because in each market structure the firm cancharge a price above marginal costs.b.Monopolistic competition is similar to perfect competition because both market structures arecharacterized by free entry.c.Monopolistic competition is similar to oligopoly because both market structures are characterizedby barriers to entry.d.Monopolistic competition is similar to perfect competition because both market structures arecharacterized by many sellers.ANS: C DIF: 2 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Analytical4. Which of the following statements is not correct?a.Monopolistic competition is different from monopoly because monopolistic competition ischaracterized by free entry, whereas monopoly is characterized by barriers to entry.b.Both monopolistic competition and oligopoly fall in between the more extreme market structures ofcompetition and monopoly.c.Monopolistic competition is different from oligopoly because each seller in monopolisticcompetition is small relative to the market, whereas each seller can affect the actions of othersellers in an oligopoly.d.Both monopolistic competition and perfect competition are characterized by product differentiation. ANS: D DIF: 2 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Analytical5. Monopolistic competition is a type ofa.oligopoly.b.market structure.c.price discrimination.d.advertising strategy.ANS: B DIF: 1 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: Definitional6. A monopolistically competitive market has characteristics that are similar toa. a monopoly only.b. a competitive firm only.c.both a monopoly and a competitive firm.d.neither a monopoly nor a competitive firm.ANS: C DIF: 1 REF: 16-0 NAT: AnalyticLOC: Monopolistic competition TOP: Monopolistic competitionMSC: ApplicativeChapter 16/Monopolistic Competition 1087 Sec01 - Monopolistic Competition - Between Monopoly and Perfect Competition MULTIPLE CHOICE1. A typical firm in the U. S. economy would be classified asa.perfectly competitive.b.imperfectly competitive.c. a duopolist.d.an oligopolist.ANS: B DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive2. The typical firm in the U. S. economya.has some degree of market power.b.sells its product for a price that is equal to the marginal cost of producing the last unit.c.is perfectly competitive.d.is a monopoly.ANS: A DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive3. Which of the following pairs illustrates the two extreme examples of market structures?petition and oligopolypetition and monopolyc.monopoly and monopolistic competitiond.oligopoly and monopolistic competitionANS: B DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive4. The general term for market structures that fall somewhere in-between monopoly and perfect competition isa.incomplete markets.b.imperfectly competitive markets.c.oligopoly markets.d.monopolistically competitive markets.ANS: B DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Definitional5. The two types of imperfectly competitive markets area.markets with differentiated products and monopoly.b.markets with differentiated products and oligopoly.c.oligopoly and monopoly.d.monopolistic competition and oligopoly.ANS: D DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive6. The two types of imperfectly competitive markets area.monopoly and monopolistic competition.b.monopoly and oligopoly.c.monopolistic competition and oligopoly.d.monopolistic competition and cartels.ANS: C DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Definitional7. In a market that is characterized by imperfect competition,a.firms are price takers.b.there are always a large number of firms.c.there are at least a few firms that compete with one another.d.the actions of one firm in the market never have any impact on the other firms' profits.ANS: C DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive8. Firms in industries that have competitors but do not face so much competition that they are price takers areoperating in either a(n)a.oligopoly or perfectly competitive market.b.oligopoly or monopoly market.c.oligopoly or monopolistically competitive market.d.monopoly or monopolistically competitive market.ANS: C DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive9. Imperfectly competitive firms are characterized bya.horizontal demand curves.b.standardized products.c. a large number of small firms.d.price making ability.ANS: D DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Imperfect competitionMSC: Interpretive10. An oligopolya.has a concentration ratio of less than 50 percent.b.is a price taker.c.is a type of imperfectly competitive market.d.has many firms rather than just one firm or a few firms.ANS: C DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Oligopoly MSC: Interpretive11. An oligopoly is a market in whicha.there are only a few sellers, each offering a product similar or identical to the products offered byother firms in the market.b.firms are price takers.c.the actions of one seller in the market have no impact on the other sellers' profits.d.there are many price-taking firms, each offering a product similar or identical to the productsoffered by other firms in the market.ANS: A DIF: 1 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Oligopoly MSC: Definitional12. One characteristic of an oligopoly market structure is:a.firms in the industry are typically characterized by very diverse product lines.b.firms in the industry have some degree of market power.c.products typically sell at a price equal to their marginal cost of production.d.the actions of one seller have no impact on the profitability of other sellers.ANS: B DIF: 2 REF: 16-1 NAT: AnalyticLOC: Monopolistic competition TOP: Oligopoly MSC: Interpretive。