国际经济学作业答案第六章

国际经济学作业答案第六章This manuscript was revised by the office on December 10, 2020.Chapter 6 Economies of Scale, Imperfect Competition,and International Trade Multiple Choice Questions1. External economies of scale arise when the cost per unit(a) r ises as the industry grows larger.(b) f alls as the industry grows larger rises as the average firm growslarger.(c) f alls as the average firm grows larger.(d) r emains constant.(e) N one of the above.Answer: B2. Internal economies of scale arise when the cost per unit(a) r ises as the industry grows larger.(b) f alls as the industry grows larger.(c) r ises as the average firm grows larger.(d) f alls as the average firm grows larger.(e) N one of the above.Answer: D3. External economies of scale(a) m ay be associated with a perfectly competitive industry.(b) c annot be associated with a perfectly competitive industry.(c) t ends to result in one huge monopoly.(d) t ends to result in large profits for each firm.(e) N one of the above.Answer: A4. Internal economies of scale(a) m ay be associated with a perfectly competitive industry.(b) c annot be associated with a perfectly competitive industry.(c) a re associated only with sophisticated products such as aircraft.(d) c annot form the basis for international trade.(e) N one of the above.Answer: B5. A monopolistic firm(a)can sell as much as it wants for any price it determines in the market.(b) c annot determine the price, which is determined by consumer demand.(c) w ill never sell a product whose demand is inelastic at the quantitysold.(d) c annot sell additional quantity unless it raises the price on eachunit.(e) N one of the above.Answer: C6. Monopolistic competition is associated with(a) c ut-throat price competition.(b) p roduct differentiation.(c) e xplicit consideration at firm level of the feedback effects of otherfirms’ pricing decisions.(d) h igh profit margins.(e) N one of the above.Answer: B7. The most common market structure is(a) p erfect competition.(b) m onopolistic competition.(c) s mall-group oligopoly.(d) p erfectly vertical integration.(e) N one of the above.Answer: C8. Modeling trade in monopolistic industries is problematic because(a) t here is no one generally accepted model of oligopoly behavior.(b) t here are no models of oligopoly behavior.(c) i t is difficult to find an oligopoly in the real world.(d) c ollusion among oligopolists makes usable data rare.(e) N one of the above.Answer: A9. Where there are economies of scale, the scale of production possible in acountry is constrained by(a) t he size of the country.(b) t he size of the trading partner’s country.(c) t he size of the domestic market.(d) t he size of the domestic plus the foreign market.(e) N one of the above.Answer: D10. Where there are economies of scale, an increase in the size of the marketwill(a) i ncrease the number of firms and raise the price per unit.(b) d ecrease the number of firms and raise the price per unit.(c) i ncrease the number of firms and lower the price per unit.(d) d ecrease the number of firms and lower the price per unit.(e) N one of the above.Answer: C11. The simultaneous export and import of widgets by the United States is anexample of(a) i ncreasing returns to scale.(b) i mperfect competition.(c) i ntra-industry trade.(d) i nter-industry trade.(e) N one of the above.Answer: C12. If output more than doubles when all inputs are doubled, production issaid to occur under conditions of(a) i ncreasing returns to scale.(b) i mperfect competition.(c) i ntra-industry trade.(d) i nter-industry trade.(e) N one of the above.Answer: A13. Intra-industry trade can be explained in part by(a) t ransportation costs within and between countries.(b) p roblems of data aggregation and categorization.(c) i ncreasing returns to scale.(d) A ll of the above.(e) N one of the above.Answer: D14. If some industries exhibit internal (firm specific) increasing returns toscale in each country, we should not expect to see(a) i ntra-industry trade between countries.(b) p erfect competition in these industries.(c) i nter-industry trade between countries.(d) h igh levels of specialization in both countries.(e) N one of the above.Answer: B15. Intra-industry trade is most common in the trade patterns of(a) d eveloping countries of Asia and Africa.(b) i ndustrial countries of Western Europe.(c) a ll countries.(d) N orth-South trade.(e) N one of the above.Answer: B16. International trade based on scale economies is likely to be associatedwith(a) R icardian comparative advantage.(b) c omparative advantage associated with Heckscher-Ohlin factor-proportions.(c) c omparative advantage based on quality and service.(d) c omparative advantage based on diminishing returns.(e) N one of the above.Answer: E17. International trade based on external scale economies in both countriesis likely to be carried outby a(a) r elatively large number of price competing firms.(b) r elatively small number of price competing firms.(c) r elatively small number of competing oligopolists.(d) m onopoly firms in each country/industry.(e) N one of the above.Answer: A18. International trade based solely on internal scale economies in bothcountries is likely to be carried out by a(a) r elatively large number of price competing firms.(b) r elatively small number of price competing firms.(c) r elatively small number of competing oligopolists.(d) m onopoly firms in each country/industry.(e) N one of the above.Answer: D19. A monopoly firm engaged in international trade will(a) e quate average to local costs.(b) e quate marginal costs with foreign marginal revenues.(c) e quate marginal costs with the highest price the market will bear.(d) e quate marginal costs with marginal revenues in both domestic and inforeign markets.(e) N one of the above.Answer: D20. A monopoly firm will maximize profits by(a) c harging the same price in domestic and in foreign markets.(b) p roducing where the marginal revenue is higher in foreign markets.(c) p roducing where the marginal revenue is higher in the domestic market.(d) e quating the marginal revenues in domestic and foreign markets.(e) N one of the above.Answer: D21. A firm in monopolistic competition(a) e arns positive monopoly profits because each sells a differentiatedproduct.(b) e arns positive oligopoly profits because each firm sells adifferentiated product.(c) e arns zero economic profits because it is in perfectly or purecompetition.(d) e arns zero economic profits because of free entry.(e) N one of the above.Answer: D22. The larger the number of firms in a monopolistic competition situation,(a) t he larger are that country’s exports.(b) t he higher is the price charged.(c) t he fewer varieties are sold.(d) t he lower is the price charged.(e) N one of the above.Answer: D23. The monopolistic competition model is one in which there is/are(a) a monopoly.(b) p erfect competition.(c) e conomies of scale.(d) g overnment intervention in the market.(e) N one of the above.Answer: C24. In industries in which there are scale economies, the variety of goodsthat a country can produce is constrained by(a) t he size of the labor force.(b) a nti-trust legislation.(c) t he size of the market.(d) t he fixed cost.(e) N one of the above.Answer: C25. An industry is characterized by scale economies, and exists in twocountries. Should these two countries engage in trade such that thecombined market is supplied by one country’s industry, then(a) c onsumers in both countries would suffer higher prices and fewervarieties.(b) c onsumers in the importing country would suffer higher prices andfewer varieties.(c) c onsumers in the exporting country would suffer higher prices andfewer varieties.(d) c onsumers in both countries would enjoy fewer varieties available butlower prices.(e) N one of the above.Answer: E26. An industry is characterized by scale economies and exists in twocountries. In order for consumers of its products to enjoy both lower prices and more variety of choice,(a) e ach country’s marginal cost must equal that of the other country.(b) t he marginal cost of this industry must equal marginal revenue in theother.(c) t he monopoly must lower prices in order to sell more.(d) t he two countries must engage in international trade one with theother.(e) N one of the above.Answer: D27. A product is produced in a monopolistically competitive industry withscale economies. If this industry exists in two countries, and these two countries engage in trade one with the other, then we would expect(a) t he country in which the price of the product is lower will export theproduct.(b) t he country with a relative abundance of the factor of production inwhich production of the product is intensive will export this product.(c) e ach of the countries will export different varieties of the productto the other.(d) n either country will export this product since there is no comparativeadvantage.(e) N one of the above.Answer: C28. The reason why one country may export a product which is produced withpositive scale economies is(a) i ts labor productivity will tend to be higher.(b) i t enjoys a relative abundance of the factor intensely used in theproduct’s production.(c) i ts demand is biased in favor of the product.(d) i ts demand is biased against the product.(e) N one of the above.Answer: E29. Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition, are likely to beengaged in(a) m onopolistic competition.(b) i nter-industry trade.(c) i ntra-industry trade.(d) H eckscher-Ohlin trade.(e) N one of the above. Answer: B30. Two countries engaged in trade in products with scale economies, producedunder conditions of monopolistic competition, are likely to be engaged in(a) p rice competition.(b) i nter-industry trade.(c) i ntra-industry trade.(d) H eckscher-Ohlinean trade.(e) N one of the above.Answer: C31. History and accident determine the details of trade involving(a) R icardian and Classical comparative advantage.(b) H eckscher-Ohlin model consideration.(c) t aste reversals.(d) s cale economies.(e) N one of the above.Answer: D32. We often observe intra-industry North-South trade in “computers andrelated devices.” This is due to(a) c lassification and aggregation ambiguities.(b) m onopolistic competition.(c) s pecific factors issues.(d) s cale economies.(e) N one of the above.Answer: A33. We often observe “pseudo-intra-industry trade” between the UnitedStates and Mexico. Actually, such trade is consistent with(a) o ligopolistic markets.(b) c omparative advantage associated with Heckscher-Ohlin model.(c) o ptimal tariff issues.(d) h uge sucking sound.(e) N one of the above.Answer: B34. Intra-industry trade will tend to dominate trade flows when which of thefollowing exists(a) L arge differences between relative country factor availabilities(b) S mall differences between relative country factor availabilities(c) H omogeneous products that cannot be differentiated(d) C onstant cost industries(e) N one of the above.Answer: B35. The most common form of price discrimination in international trade is(a) n on-tariff barriers.(b) V oluntary Export Restraints.(c) d umping.(d) p referential trade arrangements.(e) N one of the above.Answer: CEssay Questions1. Why is it that if an industry were operating under conditions of domesticinternal scale economies (applies to firm in the country)—then theresultant equilibrium cannot be consistent with the pure competitionmodelAnswer: Because once one firm became bigger than another, or if one firm began the industry, then no other firm would be able to match itsper 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 orestablishing 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 comparativeadvantage.Answer: This statement is true, since the reason the seller is amonopolist may be that it happened to have been the first toproduce this product in this country. It may have no connection toany supply or demand related factors; nor to any natural or man-made availability. This is all exactly the opposite of theHeckscher-Ohlin Neo-Classical model’s explanation of thedeterminants of comparative advantage.4. It is possible that trade based on external scale economies may leave acountry 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 alsoexternal to individual countries. That is, the larger the worldwideindustry (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-industrytrade.6. Why are increasing returns to scale and fixed costs important in modelsof international trade and monopolistic competitionAnswer: There are many answers. Three of these are(a) I ncreasing returns to scale, and high fixed costs may beinconsistent with perfect competition. In such a case, theinitial autarkic state may be a suboptimal equilibrium. Forexample, relative prices may not equal marginal rates oftransformation. It follows from this that a change in outputcompositions associated with trade may result in a nationalwelfare for one or both trading countries that is inferior tothat associated with the initial autarkic conditions. Hence no“gains from trade.”(b) I n a case of increasing scale economies at the firm or plantlevel, the determination of which product will be exported bywhich country is ex-ante indeterminate. Therefore, derivingclear implications concerning the effects of trade on incomedistributions such as may be derived from the Samuelson-StolperTheorem is no longer generally possible.(c) M arket structures containing positive scale economies andimperfect competition may allow for “two-way trade,” orintra-industry trade. As in b. above, the various theoremsderivable from the Heckscher-Ohlin model concerning directionsof trade and income distributions are no longer generallyapplicable.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 expandingAnswer: 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 theexports are relatively intense. This may create situations inwhich unskilled labor’s already relatively low relative incomeswould worsen in a country such as the ., hence heating up “c lasswarfare.” In the case of intra-industry trade, the expandingexports will tend to be in relatively fragmented subsets ofproducts (“brands”). Such export expansion will have nodeterminant or systematic tendency to affect relative factorreturns in any deterministic manner.8. Explain why positive economies of scale in one (of two) sectors mayestablish 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 (thoughit may affect the equilibrium terms of trade). When positive scaleeconomies apply to the production of one product, the country thatcan devote more resources (in absolute terms) will be able to sellthat product cheaper, and therefore will be more likely to gain a“revealed” comparative advantage in that product. This will bethe country with more factors (both labor and capital)—the largercountry.Quantitative/Graphing Problems1. The figure above represents the demand and cost functions facing aBrazilian Steel producing monopolist. If it were unable to export, and was constrained by its domestic market, what quantity would it sell at what priceAnswer: 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 ofits 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 priceAnswer: 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 whatAnswer: $5/ton.4. While selling exports it would also maximize its domestic sales byequating its marginal (opportunity) cost to its marginal revenue of $5.How much steel would the firm sell domestically, and at what priceAnswer: 4 million tons at $10/ton.5. The Brazilian firm is charging its foreign .) customers one half theprice it is charging its domestic customers. Is this good or bad for the real income or economic welfare of theUnited States Is the Brazilian firm engaged in dumping Is this predatory behavior on the partof the Brazilian steel companyAnswer: Good. Yes, if you define dumping as selling abroad at a price lower than domestically. No, if by dumping you mean selling belowmarginal cost. No—this is not being done in order to capturemarket shares, but rather is “mere” static profit maximizationbehavior, as is expected of any self-respecting monopolist.6. The following Table describes the labor-input coefficients needed toproduce one Widget in England and Portugal. Both countries are identical in size, tastes, technology. This technology is described in the table below:To ProduceThis Many Widgets,Or This Many Apples Labor-HourRequirements132536475869710Let us assume that each country has 10 labor-hours available. Further, consumers always consume an equal amount of apples and widgets.(a) H ow of each product will be produced in England under autarky 2widgets and 2 apples.(b) J udging from autarky conditions, which country has a comparativeadvantage in widgets(c) I f England (completely) specialized in widgets, how many widgets wouldbe produced, and how many apples(d) I f the world terms of trade were established at widgets Apples,which country would enjoy gains from trade (as compared to The autarky solution)(e) I f Portugal were to completely specialize in widgets, how would theanswers to c and d change(f) W hat would the production possibility curve look like in each country Answers: (a) 2 widgets and 2 apples(b) N one(c) 7 widgets in England and 7 apples in Portugal(d) b oth would gain from trade. Instead of consuming 2 widgets and2 apples, they would each consume widgets and apples.(e) S ame numbers as c, except that the countries will each beassigned a different product. Exactly the same answer for d.(f) c onvex to the origin.。