國際經(jīng)濟學理論與政策習題06

Chapter6:EconomiesofScale,ImperfectCompetition,andInternationalTradeExternaleconomiesofscalearisewhenthecostperunitrisesastheindustrygrowslarger.fallsastheindustrygrowslargerrisesastheaveragefirmgrowslarger.fallsastheaveragefirmgrowslarger.remainsconstant.Noneoftheabove.Answer:BInternaleconomiesofscalearisewhenthecostperunitrisesastheindustrygrowslarger.fallsastheindustrygrowslarger.risesastheaveragefirmgrowslarger.fallsastheaveragefirmgrowslarger.Noneoftheabove.Answer:DExternaleconomiesofscaleA. maybeassociatedwithaperfectlycompetitiveindustry.cannotbeassociatedwithaperfectlycompetitiveindustry.tendstoresultinonehugemonopoly.tendstoresultinlargeprofitsforeachfirm.Noneoftheabove.Answer:AInternaleconomiesofscaleA. maybeassociatedwithaperfectlycompetitiveindustry.B. cannotbeassociatedwithaperfectlycompetitiveindustry.areassociatedonlywithsophisticatedproductssuchasaircraft.cannotformthebasisforinternationaltrade.Noneoftheabove.Answer:BAmonopolisticfirmcansellasmuchasitwantsforanypriceitdeterminesinthemarket.cannotdeterminetheprice,whichisdeterminedbyconsumerdemand.willneversellaproductwhosedemandisinelasticatthequantitysold.cannotselladditionalquantityunlessitraisesthepriceoneachunit.Noneoftheabove.Answer:CMonopolisticcompetitionisassociatedwithcut-throatpriceductdifferentiation.explicitconsiderationatfirmlevelofthefeedbackeffectsofotherfirms'pricingdecisions.highprofitmargins.Noneoftheabove.Answer:BThemostcommonmarketstructureisperfectcompetition.monopolisticcompetition.small-groupoligopoly.perfectlyverticalintegration.Noneoftheabove.Answer:CModelingtradeinmonopolisticindustriesisproblematicbecausethereisnoonegenerallyacceptedmodelofoligopolybehavior.therearenomodelsofoligopolybehavior.itisdifficulttofindanoligopolyintherealworld.collusionamongoligopolistsmakesusabledatarare.Noneoftheabove.Answer:AWherethereareeconomiesofscale,thescaleofproductionpossibleinacountryisconstrainedbythesizeofthecountry.thesizeofthetradingpartner'scountry.thesizeofthedomesticmarket.thesizeofthedomesticplustheforeignmarket.Noneoftheabove.Answer:DWherethereareeconomiesofscale,anincreaseinthesizeofthemarketwillincreasethenumberoffirmsandraisethepriceperunit.decreasethenumberoffirmsandraisethepriceperunit.increasethenumberoffirmsandlowerthepriceperunit.decreasethenumberoffirmsandlowerthepriceperunit.Noneoftheabove.Answer:CThesimultaneousexportandimportofwidgetsbytheUnitedSer-industrytrade.Noneoftheabove.Answer:CIfoutputmorethandoubleswhenallinputsaredoubled,er-industrytrade.Noneoftheabove.AnswerAIntra-industrytradecanbeexplainedinpartbytransportationcostswithinandbetweenblemsofdataaggregationandcategorization.increasingreturnstoscale.Alloftheabove.Noneoftheabove.Answer:DIfsomeindustriesexhibitinternal(firmspecific)increasingreturnstoscaleineachcountry,er-industrytradebetweencountries.highlevelsofspecializationinbothcountries.Noneoftheabove.Answer:BIntra-industrytradeismostcommoninthetradepatternsofdevelopingcountriesofAsiaandAfrica.industrialcountriesofWesternEurope.allcountries.North-Southtrade.Noneoftheabove.Answer:BInternationaltradebasedonscaleeconomiesislikelytobeassociatedwithRicardiancomparativeparativeadvantageassociatedwithHeckscher-Ohlinparativeadvantagebasedonqualityandparativeadvantagebasedondiminishingreturns.Noneoftheabove.Answer:EInternationaltradebasedonexternalscaleeconomiesinbothcountriesislikelytobecarriedoutbyarelativelylargenumberofpricecompetingfirms.relativelysmallnumberofpricecompetingfirms.relativelysmallnumberofcompetingoligopolists.monopolyfirmsineachcountry/industry.Noneoftheabove.Answer:AInternationaltradebasedsolelyoninternalscaleeconomiesinbothcountriesislikelytobecarriedoutbyarelativelylargenumberofpricecompetingfirms.relativelysmallnumberofpricecompetingfirms.relativelysmallnumberofcompetingoligopolists.monopolyfirmsineachcountry/industry.Noneoftheabove.Answer:DAmonopolyfirmengagedininternationaltradewillequateaveragetolocalcosts.equatemarginalcostswithforeignmarginalrevenues.equatemarginalcostswiththehighestpricethemarketwillbear.equatemarginalcostswithmarginalrevenuesinbothdomesticandinforeignmarkets.Noneoftheabove.Answer:DAmonopolyfirmwillmaximizeprofitsbychargingthesamepriceindomesticandinforeignducingwherethemarginalrevenueishigherinforeignducingwherethemarginalrevenueishigherinthedomesticmarket.equatingthemarginalrevenuesindomesticandforeignmarkets.Noneoftheabove.Answer:DAfirminmonopolisticcompetitionearnspositivemonopolyprofitsbecauseeachsellsadifferentiatedproduct.earnspositiveoligopolyprofitsbecauseeachfirmsellsadifferentiatedproduct.earnszeroeconomicprofitsbecauseitisinperfectlyorpurecompetition.earnszeroeconomicprofitsbecauseoffreeentry.Noneoftheabove.Answer:DThelargerthenumberoffirmsinamonopolisticcompetitionsituation,thelargerarethatcountry'sexports.thehigheristhepricecharged.thefewervarietiesaresold.theloweristhepricecharged.Noneoftheabove.Answer:DThemonopolisticcompetitionmodelisoneinwhichthereis/ernmentinterventioninthemarket.Noneoftheabove.Answer:CInindustriesinwhichtherearescaleeconomies,thevarietyofgoodsthatacountrycanproduceisconstrainedbythesizeofthelaborforce.anti-trustlegislationthesizeofthemarket.thefixedcost.Noneoftheabove.Answer:CAnindustryischaracterizedbyscaleeconomies,andexistsintwocountries.Shouldthesetwocountriesengageintradesuchthatthecombinedmarketissuppliedbyonecountry'sindustry,thenconsumersinbothcountrieswouldsufferhigherpricesandfewervarieties.consumersintheimportingcountrywouldsufferhigherpricesandfewervarieties.consumersintheexportingcountrywouldsufferhigherpricesandfewervarieties.consumersinbothcountrieswouldenjoyfewervarietiesavailablebutlowerprices.Noneoftheabove.Answer:EAnindustryischaracterizedbyscaleeconomiesandexistsintwocountries.Inorderforconsumersofitsproductstoenjoybothlowerpricesandmorevarietyofchoice,eachcountry'smarginalcostmustequalthatoftheothercountry.themarginalcostofthisindustrymustequalmarginalrevenueintheother.themonopolymustlowerpricesinordertosellmore.thetwocountriesmustengageininternationaltradeonewiththeother.Noneoftheabove.Answer:DAproductisproducedinamonopolisticallycompetitiveindustrywithscaleeconomies.Ifthisindustryexistsintwocountries,andthesetwocountriesengageintradeonewiththeother,thenwewouldexpectthecountryinwhichthepriceoftheproductislowerwillexporttheproduct.thecountrywitharelativeabundanceofthefactorofproductioninwhichproductionoftheproductisintensivewillexportthisproduct.eachofthecountrieswillexportdifferentvarietiesoftheproducttotheother.neithercountrywillexportthisproductsincethereisnocomparativeadvantage.Noneoftheabove.Answer:CThereasonwhyonecountrymayexportaproductwhichisproducedwithpositivescaleeconomiesisitslaborproductivitywilltendtobehigher.itenjoysarelativeabundanceofthefactorintenselyusedintheproduct'sproduction.itsdemandisbiasedinfavoroftheproduct.itsdemandisbiasedagainsttheproduct.Noneoftheabove.Answer:ETwocountriesengagedintradeinproductswithnoscaleeconomies,producedunderconditionsofperfectcompetition,ra-industrytrade.Heckscher-Ohlintrade.Noneoftheabove.Answer:BTwocountriesengagedintradeinproductswithscaleeconomies,producedunderconditionsofmonopolisticcompetition,arelikelytobeengagedinpriceer-industryra-industrytrade.Heckscher-Ohlineantrade.Noneoftheabove.Answer:CHistoryandaccidentdeterminethedetailsoftradeinvolvingRicardianandClassicalcomparativeadvantage.Heckscher-Ohlinmodelconsideration.tastereversals.scaleeconomies.Noneoftheabove.Answer:DWeoftenobserveintra-industryNorth-Southtradein"computersandrelateddevices."Thisisduetoclassificationandaggregationambiguities.monopolisticcompetition.specificfactorsissues.scaleeconomies.Noneoftheabove.Answer:AWeoftenobserve"pseudo-intra-industrytrade"betweentheUnitedStatesandMexico.Actually,suchtradeisconsistentwitholigopolisticparativeadvantageassociatedwithHeckscher-Ohlinmodel.optimaltariffissues.hugesuckingsound.Noneoftheabove.Answer:BIntra-industrytradewilltendtodominatetradeflowswhenwhichofthefollowingexists?LargedifferencesbetweenrelativecountryfactoravailabilitiesSmalldifferencesbetweenrelativecountryfactoravailabilitiesHomogeneousproductsthatcannotbedifferentiatedConstantcostindustriesNoneoftheabove.Answer:BThemostcommonformofpricediscriminationininternationaltradeisnon-tariffbarriers.VoluntaryExportRestraints.dumping.preferentialtradearrangements.Noneoftheabove.Answer:C

EssayQuestionsWhyisitthatanindustryisoperatingunderconditionsofdomesticinternalscaleeconomies(appliestofirminthecountry)-thentheresultantequilibriumcannotbeconsistentwiththepurecompetitionmodel?Answer:Becauseonceonefirmbecamebiggerthananother,orifonefirmbegantheindustry,thennootherfirmwouldbeabletomatchitsperunitcost,sothattheywouldbedrivenoutoftheindustry.Isitpossiblethatifpositivescaleeconomiescharacterizeanindustry,thatitsequilibriummaybeconsistentwithpurelycompetitiveconditions?Explainhowthiscouldhappen.Answer:Yes.Ifthescaleeconomieswereexternaltothefirm,thenthereisnoreasonwhythefirmsmaynotbeinperfectcompetition.Ifascaleeconomyisthedominanttechnologicalfactordefiningorestablishingcomparativeadvantage,thentheunderlyingfactsexplainingwhyaparticularcountrydominatesworldmarketsinsomeproductmaybepurechance,orhistoricalaccident.Explain,andcomparethiswiththeansweryouwouldgivefortheHeckscher-Ohlinmodelofcomparativeadvantage.Answer:Thisstatementistrue,sincethereasonthesellerisamonopolistmaybethatithappenedtohavebeenthefirsttoproducethisproductinthiscountry.Itmayhavenoconnectiontoanysupplyordemandrelatedfactors;nortoanynaturalorman-madeavailability.ThisisallexactlytheoppositeoftheHeckscher-OhlinNeo-Classicalmodel'sexplanationofthedeterminantsofcomparativeadvantage.Itispossiblethattradebasedonexternalscaleeconomiesmayleaveacountryworseoffthanitwouldhavebeenwithouttrade.Explainhowthiscouldhappen.Answer:Oneansweristhatthetermsoftradeeffectsmaydominateanyotherfactors.Ifscaleeconomieswerenotonlyexternaltofirms,butwerealsoexternaltoindividualcountries.Thatis,thelargertheworldwideindustry(regardlessofwherefirmsorplantsarelocated),thecheaperwouldbetheper-unitcostofproduction.Describewhatworldtradewouldlooklikeinthiscase.Answer:Presumablyeachcountrywouldspecializeinsomecomponentofthefinalproduct.Thiswouldresultinmuchobservedintra-industrytrade.

Quantitative/GraphingProblemsThefigureaboverepresentsthedemandandcostfunctionsfacingaBrazilianSteelproducingmonopolist.Ifitwereunabletoexport,andwasconstrainedbyitsdomesticmarket,whatquantitywoulditsellatwhatprice?Answer: