Question 1

A corporation is considered a multinational ________ if ________.

Accepted Answer

A corporation is considered a multinational affiliate if more than 10% of its stock is held by a foreign company.

Question 2

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 ________.

Accepted Answer

Both cases involve foreign direct investment (FDI) outflows from the U.S. firm. In the first case, the investment is in the form of a minority stake in an existing foreign firm (greenfield investment). In the second case, the investment is in the form of a new production facility (brownfield investment).

Question 3

In the model of monopolistic competition,an increase in industry output will cause individual firms' demand curves to become ________,which will ________ demand for higher-priced goods and ________ demand for lower-priced goods.

Accepted Answer

In monopolistic competition, firms differentiate their products from those of their competitors. As such, each firm has some market power and faces a downward sloping demand curve. An increase in industry output implies that there are more substitutes available for consumers, causing firms' demand curves to become flatter. This means that firms will have to lower their prices to sell the same amount of output, reducing demand for higher-priced goods but increasing demand for lower-priced goods. Therefore, the correct answer is A.

Question 4

If the market for products produced by firms in a monopolistically competitive industry becomes ________,then there will be ________ firms and each firm will produce ________ output and charge a ________ price.

Accepted Answer

In a monopolistically competitive market, if the market becomes smaller, there will be fewer firms because some will exit due to decreased demand. Each remaining firm will produce less output and charge a higher price due to reduced competition and economies of scale.

Question 5

In the model of monopolistic competition,if firms have ________ average cost curves,then opening trade will cause ________ firms to ________ the industry.

Accepted Answer

In monopolistic competition, firms have different average cost curves. Opening trade will cause less efficient firms to exit the industry.

Question 6

-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?

Accepted Answer

The answer of 
-The figure above represents the demand and...

Question 7

In an industry where firms experience internal scale economies,the long-run cost of production will depend on

Accepted Answer

In an industry with internal scale economies, the long-run cost of production is influenced by the size of the market because larger markets allow firms to produce at a larger scale, reducing average costs due to economies of scale.

Question 8

In the model of monopolistic competition,trade costs between countries cause

Accepted Answer

Trade costs make exporting more costly for firms, which can discourage them from exporting even if they can earn a profit on domestic sales. This reduces competition in the foreign market, allowing domestic firms to charge higher prices than they would if trade costs were lower or nonexistent.

Question 9

In the model of monopolistic competition,trade costs between countries will cause domestic and foreign markets to have ________ prices,________ quantities sold,and ________ profit levels.

Accepted Answer

Trade costs will make it difficult for businesses to engage in international trade and cause markets to become more isolated. This results in different prices, quantities sold, and profit levels for domestic and foreign markets in monopolistic competition.

Question 10

In the model of monopolistic competition,compared to a firm with a lower marginal cost,a firm with a higher marginal cost will set a ________ price,produce ________ output,and earn ________ profits.

Accepted Answer

A firm with a higher marginal cost will set a higher price to cover its costs, produce less output due to higher costs, and earn less profit compared to a firm with a lower marginal cost.

Question 11

If an industry is imperfectly competitive,and markets are segmented then

Accepted Answer

In imperfectly competitive markets with segmented markets, firms can charge different prices in different markets. If a firm faces low prices or high competition in one market, it may engage in dumping by selling its products at a lower price in that market, while charging a higher price in another market where it has more market power. This can be profitable, especially if the firm can exploit economies of scale or lower costs in production.

Question 12

-The figure above represents the demand and cost functions facing a Brazilian Steel producing monopolist.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?

Accepted Answer

The answer of 
-The figure above represents the demand and...

Question 13

Complaints are often made to the International Trade Commission concerning foreign "dumping" practices.These complaints typically claim that

Accepted Answer

U.S. firms are harmed by the unfair pricing of foreign exporters is the correct answer because dumping is the practice of selling goods in a foreign market at a price that is lower than the price charged in the home market. This can harm U.S. firms by making it difficult for them to compete with foreign companies.

Question 14

In the model of monopolistic competition,trade costs between countries cause

Accepted Answer

In monopolistic competition, firms differentiate their products, leading to a downward sloping demand curve. When trade costs are introduced between countries, the exporting firm must incur additional costs to transport the goods to the foreign market, leading to higher marginal costs for exported goods compared to domestically sold goods. Therefore, choice A is the correct answer.

Question 15

In the model of monopolistic competition,if firms have ________ average cost curves,then opening trade will ________ the total number of firms and ________ the average price.

Accepted Answer

In monopolistic competition, firms have downward sloping average cost curves due to economies of scale. Opening trade increases market size, allowing firms to produce at a lower average cost, leading to a decrease in the total number of firms (as less efficient firms exit) and a decrease in the average price due to increased competition and efficiency.

Question 16

In the model of monopolistic competition,an increase in industry output will ________ producers of ________ higher-priced goods and ________ producers of lower-priced goods.

Accepted Answer

In monopolistic competition, an increase in industry output typically leads to more competition, which can harm producers of higher-priced goods as consumers may switch to cheaper alternatives.

Question 17

In the model of monopolistic competition,compared to a firm with a higher marginal cost,a firm with a lower marginal cost will set a ________ price,produce ________ output,and earn ________ profits.

Accepted Answer

In monopolistic competition, firms have some degree of market power and can raise their price above marginal cost. However, lower marginal costs give a firm a competitive advantage, allowing it to produce more output at a lower cost. As a result, a firm with lower marginal costs will set a lower price, produce more output, and earn higher profits than a firm with higher marginal costs. This is consistent with the basic theory of supply and demand, where lower costs lead to lower prices and higher quantities supplied.

Question 18

In the model of monopolistic competition,an increase in industry output will ________ market shares and ________ profits of producers of higher-priced goods and will ________ market shares and ________ profits of producers of lower-priced goods.

Accepted Answer

In monopolistic competition, an increase in industry output typically leads to reduced market shares and profits for producers of higher-priced goods due to increased competition, while producers of lower-priced goods may see increased market shares and profits as consumers shift towards more affordable options.

Question 19

The most common form of price discrimination in international trade is

Accepted Answer

Dumping is the most common form of price discrimination in international trade, where a country exports a product at a price lower than the price it normally charges in its own home market.

Question 20

A corporation is considered a multinational ________ if ________.

Accepted Answer

A corporation is considered a multinational parent if it owns more than 10% of a foreign firm. This means that the corporation has a significant ownership stake in a foreign company, allowing it to potentially exercise control over its operations and decisions.

Quiz 8: Firms in the Global Economy: Export Decisions,Outsourcing,and Multinational Enterprises

A corporation is considered a multinational if .

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 .

In the model of monopolistic competition,an increase in industry output will cause individual firms' demand curves to become ,which will demand for higher-priced goods and demand for lower-priced goods.

If the market for products produced by firms in a monopolistically competitive industry becomes ,then there will be firms and each firm will produce output and charge a price.

In the model of monopolistic competition,if firms have average cost curves,then opening trade will cause firms to the industry.

-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?

In an industry where firms experience internal scale economies,the long-run cost of production will depend on

In the model of monopolistic competition,trade costs between countries cause

In the model of monopolistic competition,trade costs between countries will cause domestic and foreign markets to have prices, quantities sold,and profit levels.

In the model of monopolistic competition,compared to a firm with a lower marginal cost,a firm with a higher marginal cost will set a price,produce output,and earn profits.

If an industry is imperfectly competitive,and markets are segmented then

Complaints are often made to the International Trade Commission concerning foreign "dumping" practices.These complaints typically claim that

In the model of monopolistic competition,trade costs between countries cause

In the model of monopolistic competition,if firms have average cost curves,then opening trade will the total number of firms and the average price.

In the model of monopolistic competition,an increase in industry output will producers of higher-priced goods and producers of lower-priced goods.

In the model of monopolistic competition,compared to a firm with a higher marginal cost,a firm with a lower marginal cost will set a price,produce output,and earn profits.

In the model of monopolistic competition,an increase in industry output will market shares and profits of producers of higher-priced goods and will market shares and profits of producers of lower-priced goods.

The most common form of price discrimination in international trade is

A corporation is considered a multinational if .