C211

A similarity between monopoly and monopolistic competition is that in both market structures

sellers are price makers rather than price takers

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Why do managers, at some of the largest global corporations, fail to engage in currency hedging?

They believe that the protection against fluctuations in exchange rates is not worth the potentially high cost of currency hedging.

Which of the following statements is true?

When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price

A monopolist's profits with price discrimination will be

higher than if the firm charged just one price because the firm will capture more consumer surplus.

If an IMF member country were to find itself in a severe balance of payments crisis that threatened its financial stability, the IMF would most likely:

. give the country a loan but require the country to make long-term policy reforms.

If a profit-maximizing monopolist faces a downward-sloping market demand curve, its

. marginal revenue is less than the price of the product.

Which of the following firms is the closest to being a perfectly competitive firm?

A grain farmer in Illinois

Globalization can be viewed as

A new force sweeping through the world in recent times. b. A long-run historical evolution since the dawn of human history. c. A pendulum that swings from one extreme to another from time to time.

Name teh three views of globalization

A recent force, a long-running evolution, and a pendulum

Which of the following sets of words describes the initial set of actions a firm uses to gain competitive advantage and the other firm's response to it?

Attack, counterattack

Which of the following statements is not correct?

Both monopolistic competition and perfect competition are characterized by product differentiation.

Which of the followng is true of globalization according to the pendulum view?

Globalization is a not a one-directional phenomenon.

Which of the following is NOT a non terriff trade barrier

Cultural distance

Which of the following is not a nontarriff trade barrier?

Cultural distance

_____ is defined as the conversion of one currency into another at Time 1, with an agreement to revert it back to the original currency at a specific Time 2 in the future.

Currency swap

Chile requries 50 units of resource to porduce one ton of wine and 20 units of resource to produce 1 ton of blueberries. France requries 30 units of resrouce to produce 1 ton of wine and 40 units of resource to produce one ton of blueberries. Which if the following is true?

France has a comparative advantage in wine.

Which of the following is NOT a method used by competitors to signal their intention to reduce competitive intensity to other competitors?

Developing new markets where there is less competition

According to the theory of absolute advantage, under free trade,

Each nation gains by specializing in economic activities in which a nation has absolute advantage.

Which of the following is true of globalization?

It is a type of globalization that lies between total isolation and total globalization.

Which of the following is a benefit of FDI to home countries?

Learning from operations

Which of the following is a disadvantage of licensing and franchising?

Little control over marketing

Which of the following is unique to a monopolistically competitive firm when compared to an oligopoly?

Monopolistic competition features many sellers

Which of the following statements is correct?

Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers

Which of the following is a modern trade theory?

National competitive advantage

Which of the following is a modern trade theory?Comparative advantage b. National competitive advantage c.Absolute advantage d.mercantilism

National competitive advantage

Which of the following is not a key feature of monopolistic competition?

Positive economic profits for firms in the long run

Which of the following political perspectives maintains the view that FDI has both pros and cons and can only be approved when its benefits outweigh costs?

Pragmatic nationalism

____ is defined as the extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm.

Resource similarity

Which of the following represents the firm's short-run condition for shutting down?

Shut down if TR < VC

Which of the following theories does NOT lead to the conclusion that unrestricted free trade is in the best interests of all countries?

Strategic trade theory

Which of the following are the primary types of foreign exchange transactions made by financial companies?

Swaps, spot transactions, forward transactions

MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____

a. ownership

The ___ of globalization suggests that globalization is neither recent nor one directional.

a. pendulum view

If there is an increase in market demand in a perfectly competitive market, then in the short run

a. profits will rise.

The fundamental source of monopoly power is

barriers to entry.

When firms are said to be price takers, it implies that if a firm raises its price,

buyers will go elsewhere

A monopoly can earn positive profits because it

can maintain a price such that total revenues will exceed total costs.

The price leader's _____ is defined as sufficient resources possessed to deter and combat defection.

capacity to punish

Risk analysis of any country must include an analysis of the country's:

currency risks

With regard to foreign market entry, the resource-based view argues that foreign firms need to

deploy overwhelming resources and capabilities to offset their liability of foreignness.

Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue

does not change

Monopoly firms face

downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve.

According to the theory of absolute advantage, under free trade___

each nation gains by specializing in economic activities in which a nation has absolute advantage.

If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will

exactly triple

When new firms enter a perfectly competitive market,

existing firms may see their costs rise if more firms compete for limited resources.

A competitive market is in long-run equilibrium. If demand decreases, we can be certain that price will

fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium.

The resource based view of global business differs from the instituion based view of global business in that the resource based view

focuses on teh internal strengths of the firm

In both perfect competition and monopolistic competition, each firm

has many competitors.

Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In this market, an increase in demand will

increase price in the short run but not in the long run.

The __ theory is based on the assumption that the wealth of the world is fixed.

mercantilism

The ___ theory viewed international trade as a zero sum game.

mercantilism

The two types of imperfectly competitive markets are

monopolistic competition and oligopoly.

Import Quotas are a type of?

nontariff barrier

OLI advantages refer to a firms quest for _____ via FDI

ownership advantages, location advantages, and internalization advantages

The deadweight loss associated with a monopoly occurs because the monopolist

produces an output level less than the socially optimal level.

The ___ principle advocated that governments should actively portect domestic industries from imports and vigorously promote exports

protectionism

The short-run supply curve for a firm in a perfectly competitive market is

the portion of its marginal cost curve that lies above its average variable cost.

Price discrimination is a rational strategy for a profit-maximizing monopolist when

there is no opportunity for arbitrage across market segments.