国际经济学作业答案-第六章

Chapter 6 Economies of Scale Imperfect Competition and International Trade Multiple Choice Questions 1 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 2 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 3 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 4 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 Chapter 6 Economies of Scale Imperfect Competition and International Trade 63 5 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 6 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 7 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 8 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 9 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 64 Krugman Obstfeld Seventh Edition 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 Chapter 6 Economies of Scale Imperfect Competition and International Trade 65 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 66 Krugman Obstfeld Seventh Edition 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 Chapter 6 Economies of Scale Imperfect Competition and International Trade 67 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 then a 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 Answer E 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 Answer D 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 expect a 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 Answer C 28 The reason why one country may export a product which is produced with positive scale economies is a 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 Answer E 29 Two countries engaged in trade in products with no scale economies produced under conditions of perfect competition are likely to be engaged in a monopolistic competition b inter industry trade c intra industry trade d Heckscher Ohlin trade e None of the above Answer B 68 Krugman Obstfeld Seventh Edition 30 Two countries engaged in trade in products with scale economies produced under conditions of monopolistic competition are likely to be engaged in a price competition b inter industry trade c intra industry trade d Heckscher Ohlinean trade e None of the above Answer C 31 History and accident determine the details of trade involving a Ricardian and Classical comparative advantage b Heckscher Ohlin model consideration c taste reversals d scale economies e None of the above Answer D 32 We often observe intra industry North South trade in computers and related devices This is due to a classification and aggregation ambiguities b monopolistic competition c specific factors issues d scale economies e None of the above Answer A 33 We often observe pseudo intra industry trade between the United States and Mexico Actually such trade is consistent with a oligopolistic markets b comparative advantage associated with Heckscher Ohlin model c optimal tariff issues d huge sucking sound e None of the above Answer B 34 Intra industry trade will tend to dominate trade flows when which of the following exists a Large differences between relative country factor availabilities b Small differences between relative country factor availabilities c Homogeneous products that cannot be differentiated d Constant cost industries e None of the above Answer B Chapter 6 Economies of Scale Imperfect Competition and International Trade 69 35 The most common form of price discrimination in international trade is a non tariff barriers b Voluntary Export Restraints c dumping d preferential trade arrangements e None of the above Answer C Essay Questions 1 Why is it that if an industry were 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 Answer Because once one firm became bigger than another or if one firm began the industry then no other firm would be able to match its per unit cost so that they would be driven out of the industry 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 Answer Yes If the scale economies were external to the firm then there is no reason why the firms may not be in perfect competition 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 Answer This 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 have 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 Neo Classical model s explanation of the determinants 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 Answer One answer is that the terms of trade effects may dominate any other factors 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 Answer Presumably each country would specialize in some component of the final product This would result in much observed intra industry trade 70 Krugman Obstfeld Seventh Edition 6 Why are increasing returns to scale and fixed costs important in models of international trade and monopolistic competition Answer There are many answers Three of these are a Increasing returns to scale and high fixed costs may be inconsistent with perfect competition In such a case the initial autarkic state may be a suboptimal equilibrium For example relative prices may not equal marginal rates of transformation It follows from this that a change in output compositions associated with trade may result in a national welfare for one or both trading countries that is inferior to that associated with the initial autarkic conditions Hence no gains from trade b In a case of increasing scale economies at the firm or plant level the determination of which product will be exported by which country is ex ante indeterminate Therefore deriving clear implications concerning the effects of trade on income distributions such as may be derived from the Samuelson Stolper Theorem is no longer generally possible c Market structures containing positive scale economies and imperfect competition may allow for two way trade or intra industry trade As in b above the various theorems derivable from the Heckscher Ohlin model concerning directions of trade and income distributions are no longer generally applicable 7 Explain why it may be argued that the relative importance of the intra industry component of world trade is likely to lessen economic strife or confrontation a la Stolper Samuelson associated with commercial policy within countries in which overall trade is expanding Answer In the case of the Neo Classical H O model the expansion of trade will tend to increase the incomes of those factors in which the exports are relatively intense This may create situations in which unskilled labor s already relatively low relative incomes would worsen in a country such as the U S hence heating up class warfare In the case of intra industry trade the expanding exports will tend to be in relatively fragmented subsets of products brands Such export expansion will have no determinant or systematic tendency to affect relative factor returns in any deterministic manner 8 Explain why positive economies of scale in one of two sectors may establish a comparative advantage for the large as compared to the small country in the production of the commodity which exhibits positive scale economies Answer In the case of the H O model the actual size of the country is irrelevant in the determination of the direction of trade though it may affect the equilibrium terms of trade When positive scale economies apply to the production of one product the country that can devote more resources in absolute terms will be able to sell that product cheaper and therefore will be more likely to gain a revealed comparative advantage in that product This will be the country with more factors both labor and capital the larger country Chapter 6 Economies of Scale Imperfect Competition and International Trade 71 Quantitative Graphing Problems 1 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 Answer It would sell 5 million tons at a price of 8 ton 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 Answer It would sell 10 million tons at 5 ton 3 Given the opportunity to sell at world prices the marginal opportunity cost of selling a ton domestically is what Answer 5 ton 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 Answer 4 million tons at 10 ton 5 The Brazilian firm is charging its foreign U S customers one half the price it is charging its domestic custom