Chapter 6 Economies of Scale, Imperfect Competition,
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? Multiple Choice Questions
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External economies of scale arise when the cost per unit (a) 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. Answer: B
Internal economies of scale arise when the cost per unit (a) 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. Answer: D
External economies of scale
(a) 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. Answer: A
Internal economies of scale
(a) 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. Answer: B
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A monopolistic firm
(a) 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. Answer: C
Monopolistic competition is associated with (a) 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. Answer: B
The most common market structure is (a) perfect competition.
(b) monopolistic competition. (c) small-group oligopoly.
(d) perfectly vertical integration. (e) None of the above. Answer: C
Modeling trade in monopolistic industries is problematic because (a) 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. Answer: A
Where there are economies of scale, the scale of production possible in a country is constrained by
(a) 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. Answer: D
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10. Where there are economies of scale, an increase in the size of the market will
(a) 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.
Answer: C
11. The simultaneous export and import of widgets by the United States is an example of
(a) increasing returns to scale. (b) imperfect competition. (c) intra-industry trade. (d) inter-industry trade. (e) None of the above.
Answer: C
12. If output more than doubles when all inputs are doubled, production is said to occur under
conditions of
(a) increasing returns to scale. (b) imperfect competition. (c) intra-industry trade. (d) inter-industry trade. (e) None of the above. Answer: A 13. Intra-industry trade can be explained in part by
(a) 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. Answer: D
14. If some industries exhibit internal (firm specific) increasing returns to scale in each country, we
should not expect to see
(a) 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. Answer: B
15. Intra-industry trade is most common in the trade patterns of
(a) developing countries of Asia and Africa. (b) industrial countries of Western Europe. (c) all countries.
(d) North-South trade. (e) None of the above.
Answer: B
16. International trade based on scale economies is likely to be associated with
(a) 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.
Answer: E
17. International trade based on external scale economies in both countries is likely to be carried out by a
(a) 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. Answer: A
18. International trade based solely on internal scale economies in both countries is likely to be
carried out by a
(a) 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. Answer: D 19. A monopoly firm engaged in international trade will
(a) 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. Answer: D
20. A monopoly firm will maximize profits by
(a) 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.
Answer: D
21. A firm in monopolistic competition
(a) 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.
Answer: D
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. Answer: D 23. The monopolistic competition model is one in which there is/are
(a) a monopoly.
(b) perfect competition. (c) economies of scale.
(d) government intervention in the market. (e) None of the above. Answer: C
24. In industries in which there are scale economies, the variety of goods that a country can produce
is constrained by
(a) the size of the labor force. (b) anti-trust legislation. (c) the size of the market. (d) the fixed cost. (e) None of the above.
Answer: C
国际经济学作业答案-第六章
