Chapter 6- IE

In the long run, a monopolistically competitive firm that trades internationally ____________ than it would in autarky. a.will produce more output b.will earn more monopoly profits c.will have higher average costs d.will produce more output and earn more monopoly profits

A

In the long run, a monopolistically competitive firm will produce where: a.average cost equals price. b.average cost equals marginal revenue. c.marginal revenue equals price. d.marginal cost equals price.

A

A differentiated product is one that: a.is slightly different from the competitor's product, although it is a close substitute. b.is very different. c.is traded within firms and is not for sale in retail markets. d.has a shelf life of less than a year.

A

A feature of imperfect competition is _________, which means that as the firm expands its production, average costs of production fall. Therefore, the firm can _______ its costs of production by selling internationally. a.economies of scale; decrease b.economies of scale; increase c.increasing returns to scale; decrease d.specialization; increase

A

A monopolistic competitor has fixed costs of $100 and marginal costs of $10 per unit. What is its marginal revenue at its equilibrium price and quantity? a.$10 b.$11 c.$1,100 d.$2,000

A

At its current production level, a monopolist's marginal revenue is $20 and its marginal cost is $10. Which of the following is CORRECT? a.The monopolist should produce and sell more output. b.The monopolist should produce and sell less output. c.The monopolist is maximizing its profits at its current level of output. d.More information is required to decide if the firm needs to change its production.

A

If exports of an industry are $100 million and imports are zero, which of the following is the value of the index of intra-industry trade? a.0 b.1 c.0.5 d.100 million

A

In the long run, the equilibrium number of monopolistically competitive firms with trade: a.is less than the total number of firms worldwide in autarky. b.is the same as the total number of firms worldwide in autarky. c.is greater than the total number of firms worldwide in autarky. d.may be less than, the same as, or greater than the total number of firms worldwide in autarky.

A

Intra-industry trade refers: a.to imports and exports within the same industry. b.to imports and exports originating in different industries. c.to international trade patterns predicted by the Heckscher-Ohlin model. d.to Ricardian comparative advantage.

A

NAFTA is believed to have __________ manufacturing productivity, especially in the maquiladora plants. a.raised b.lowered c.had no effect on d.greatly hindered

A

Other things equal, the level of bilateral trade between two countries will increase as their GDP: a.rises. b.falls. c.stays the same. d.becomes less equal.

A

Studies have concluded that NAFTA caused ________ in economic welfare to Canada. a.a gain b.a loss c.no change d.first a gain, then a loss

A

Studies of NAFTA have concluded that from 1994 to 2003, free trade caused ______ increases in the productivity of Mexican maquiladora firms producing for export than for Mexican firms mainly producing for the Mexican domestic market. a.larger b.smaller c.identical d.substantially larger

A

Studies of U.S.-Canadian free trade have concluded that free trade produced what effect on Canadian firms? a.increased productivity b.decreased productivity c.no change in productivity d.could not be determined

A

Suppose that industry X and industry Y have intra-industry trade indexes equal to 0.80 and 0.20, respectively. Which of the following is then correct? a.There is a greater share of intra-industry trade in industry X than in industry Y. b.There is a greater share of intra-industry trade in industry Y than in industry X. c.Industry X and industry Y have equal shares of intra-industry trade. d.There is no intra-industry trade in either industry X or industry Y.

A

The distances from Paris, France, to Frankfurt, Germany; Stockholm, Sweden; and Oslo, Norway, are about 400 miles, 450 miles, and 500 miles, respectively. Would you expect French trade to be greatest with Germany, Sweden, or Norway? a.Germany b.Sweden c.Norway d.Equal volumes of trade would be expected with each country.

A

The gravity equation is used to predict: a.the level of bilateral trade. b.the level of intra-industry trade. c.the weight of exports plus imports. d.the level of inter-industry trade.

A

The index of intra-industry trade is calculated as: a.the minimum of imports and exports divided by the average of imports and exports. b.the maximum of imports and exports divided by the sum of imports and exports. c.imports divided by exports. d.imports plus exports divided by the average of imports and exports.

A

The price charged by a monopoly firm is the market price (demand curve) at which: a.MR = MC, and usually P > MR and P > MC. b.the firm is just breaking even. c.the firm makes a normal profit. d.the firm can export its products.

A

What did the gravity equation predict about trade within the borders of a nation? a.Trade between states or regions within a nation is much more likely than trade outside the borders. b.Trade between states or regions within a nation is much less likely to occur. c.There was no predictive value for trade within a nation's borders. d.Trade between states or regions within a nation is more subject to national law and regulation and therefore not as predictable.

A

What will happen when a firm raises the price of a differentiated product in an imperfectly competitive market? a.It will see lower sales but will not lose all its sales. b.It will lose all its sales to competitor firms. c.It will actually get new customers from other firms. d.It will see an increase in revenues.

A

When average costs of production are falling, average cost: a.is higher than marginal cost. b.is equal to price. c.is negative. d.is less than marginal cost.

A

When there are increasing returns to scale, average costs must be: a.falling. b.rising. c.constant. d.falling, then rising.

A

When trade occurs among nations with similar tastes, technology, products, and costs, monopolistically competitive firms will have an incentive: a.to lower prices to get new customers and increase market share. b.to raise prices to take advantage of a lucrative situation. c.to cut corners in manufacturing to boost profits. d.to raise quality, so they can charge a higher price than the competition.

A

Whenever a firm's marginal costs are less than its average costs, its average costs must be: a.falling. b.rising. c.constant. d.falling, then rising.

A

Which of the following is NOT an assumption for monopolistic competition? a.Firms produce goods, using a technology with increasing returns to scale. b.There are many firms in the industry. c.Firms have some control over the price of the product. d.Each firm produces a good that is similar to, but differentiated from, the goods that other firms in the industry produce.

A

Which of the following is NOT characteristic of a monopolistically competitive industry? a.monopoly profits b.many firms in the industry c.differentiated products d.Individual firms can influence the market price.

A

Which of the following probably slowed NAFTA's effect on the wages of Mexican workers? a.the Mexican peso crisis in which Mexico's currency fell greatly in value b.the reluctance of the U.S. government to allow guest workers c.the Iraq war d.so much illegal immigration

A

___________ than would be the case if all firms had identical products and prices. a.flatter b.steeper c.farther to the right d.less elastic

A

A duopoly is a market structure in which: a.two consumers buy the product. b.two firms sell the product. c.one firm sells the product and one consumer buys the product. d.two firms sell the product and two consumers buy the product.

B

A monopolistic competitor has fixed costs of $100 and marginal costs of $10 per unit. What is its average cost of producing 100 units? a.$10 b.$11 c.$1,100 d.$2,000

B

A monopolistically competitive firm faces demand given by this equation: P = 50 ​Q. It has no fixed costs and its marginal cost is $20 per unit. What quantity will the firm produce when it is maximizing its profits? a.10 b.15 c.20 d.25

B

Border effects can result from: a.trade. b.tariffs. c.monopolistic competition. d.imperfect competition.

B

Firm X's total fixed costs are $1,000. Its total variable costs of producing 100 units are $2,000, and its total variable costs of producing 200 units are $4,000. Which of the following will happen to firm X's average costs as it increases output from 100 to 200 units? a.Average costs increase. b.Average costs decrease. c.Average costs remain constant. d.Average costs increase slightly.

B

For a monopolistic competitor, marginal revenue at its short-run equilibrium price and quantity equals: a.price. b.marginal cost. c.average cost. d.average revenue.

B

How do consumers benefit from trade among monopolistically competitive firms? a.Prices are the same as in autarky, but the wider choice of goods increases consumer surplus. b.Consumer surplus increases because prices are lower than in autarky, and there is a wider choice of goods. c.Prices are higher than in autarky, but the wider choice of goods increases consumer surplus. d.The government provides cash subsidies to consumers

B

If a firm has a total cost of $150 and a variable cost of $100 for producing 5 units of output, then the fixed cost is: a.$35. b.$50. c.$250. d.$100.

B

If a firm has a total fixed cost of $75 and an average variable cost of $35 for producing 10 units of output, the average total cost would be: a.$425. b.$42.50. c.$110. d.$350.

B

If the index of intra-industry trade is high, products are probably ______, and costs in both nations are ______. a.identical; different b.differentiated; similar c.identical; similar d.differentiated; different

B

If there is a duopoly and the products are identical (homogeneous), the firm selling the product for a lower price: a.will earn less revenue. b.will get 100% of the sales. c.will have a hard time being profitable. d.will be perceived to have lower quality products.

B

In a duopoly, each firm faces: a.a more elastic demand curve if it raises its price. b.a more elastic demand curve if it lowers its price. c.a perfectly elastic demand curve. d.a perfectly inelastic demand curved.

B

In long-run equilibrium with trade, losses from import competition will force some firms to ______________, increasing demand for the remaining firms' output, which will then cause their demand curves to become ______________, due to the increased variety of products from _______________. a.raise prices; steeper; new firms entering the industry b.leave the industry; flatter; foreign firms c.lower prices; more inelastic; new firms entering the industry d.lay off workers; more elastic; the research and development departments in firms

B

Mexico's gains from NAFTA have benefited mostly: a.unskilled workers. b.semi-skilled workers. c.higher-income workers. d.agricultural workers.

C

In the long run, prices in a monopolistically competitive industry ________ prices without trade. a.will be higher than b.will be lower than c.will be equal to d.will be the same as

B

Increasing returns to scale occurs when a firm's: a.average costs of production increase as its output increases. b.average costs of production decrease as its output increases. c.average fixed costs increase as its output increases. d.marginal costs increase as its output increases.

B

NAFTA probably helped productivity in Mexico's maquiladora sector, but: a.trade with China has taken on more importance. b.world competition and the close relationship with the United States may have limited its comeback. c.both governments have reversed some of the tariff reductions. d.Mexico has raised taxes on the maquiladoras, and that has caused international tension.

B

Studies of NAFTA have concluded that free trade caused ______ in the variety of U.S. imports from Mexico. a.decreases b.increases c.no change d.slight decreases

B

Studies of NAFTA have concluded that increases in the variety of U.S. imports from Mexico are equivalent to about a ________ per year reduction in Mexican import prices. a.100.2% b.10.2% c.1.2% d.0.2%

B

Suppose that imports and exports in an industry are $100 million and $200 million, respectively. Will the index of intra-industry trade for this industry rise, fall, or remain unchanged if exports fall to $100 million? a.It will rise. b.It will fall. c.It will remain unchanged. d.There is not enough information to determine how the index will change.

B

Suppose that there are 50 firms in a monopolistically competitive industry in country A and 50 firms in the same monopolistically competitive industry in country B. If country A and country B engage in international trade, we expect that the total number of firms in this industry: a.will increase. b.will decrease. c.will remain unchanged. d.will first decrease, then increase.

B

The United States has benefited from NAFTA substantially in terms of increased ____, which has lowered prices and given consumers more choices. a.prices b.variety c.manufacturing jobs d.quality

B

The costs identified with opening trade are called: a.short-run costs. b.adjustment costs. c.variable costs. d.overhead costs.

B

The gravity equation uses a calculation to predict the level of bilateral trade based directly on ____ and inversely on _____. a.wages; technology b.size of the countries' GDP; the geographic distance between the countries c.the percent of the countries' GDP in manufacturing; their level of tariffs d.the growth rates of the countries' GDP; their openness to trade

B

The gravity equation was tested and found to be very accurate in predicting: a.world trade in total. b.trade between various provinces in Canada and American states. c.trade between the United States and Japan. d.trade between nations in the European Union.

B

The higher the value for the index of intra-industry trade: a.the lower total trade is for other products. b.the greater percentage of trade in that good is intra industry. c.the more we should be concerned about job loss and outsourcing. d.the higher the gains from trade.

B

U.S. unemployment as a result of freetrade agreements such as NAFTA: a.should be taken much more seriously, and workers should be offered assistance. b.is a temporary phenomenon to which the economy will adjust within a few years. c.results in a shift into lower productivity jobs such as hamburger flipping. d.results in a shift into lower productivity jobs such as hamburger flipping and is a temporary phenomenon to which the economy will adjust within a few years.

B

What do tests of the gravity equation for trade between Canadian provinces and American states indicate? a.Individual state and individual provincial GDPs are negatively related to the amount of trade between individual states and provinces. b.Individual state and individual provincial GDPs are positively related to the amount of trade between individual states and provinces. c.Individual state and individual provincial GDPs are not at all related to the amount of trade between individual states and provinces. d.The gravity equation does not apply to U.S.Canadian trade.

B

When imports and exports for the same type of good are nearly equal: a.the laws of comparative advantage break down. b.it is an indication that nearly all the trade is intra-industry. c.exports are probably just "finished" in the nation instead of being fully sourced there. d.there is a very low level of intra-industry trade.

B

Which of the following describes the longrun situation in a monopolistically competitive market? a.Competition drives out firms until there is only one left. b.New firms enter the market because of monopoly profits, the demand curve shifts to the left and becomes flatter, and profits disappear . c.New firms enter the market and eventually there is only one kind of product, and each firm agrees to share the profits. d.Consumers are left with no choices and no close substitutes, and firms make higher profits.

B

Which of the following is NOT a characteristic of monopolistic competition? a.Firms have some control over their markets. b.Firms produce an identical product. c.Firms retain some ability to control prices. d.The average cost for firms declines as they produce more output.

B

Which of the following is likely under free trade and monopolistic competition? a.Domestic firms will always be provided cash subsidies. b.Some domestic firms will shut down. c.Consumers will not benefit at all from trade. d.Foreign firms will sell the product at a higher price in the export market.

B

With increasing returns (falling average costs), as the remaining firms expand, their demand curves become _______________ due to foreign competition, and firms must _______________. a.steeper; raise prices b.flatter; lower prices c.flatter; raise prices d.steeper; lower prices

B

Equilibrium in a monopoly occurs when: a.the monopolist has driven out all competitors. b.the monopoly firm has sold the maximum number of units. c.the monopoly firm produces the quantity that maximizes its profits (or minimizes loss) where MR = MC. d.the monopoly firm has gotten unions to agree to wage concessions.

C

"Differentiated" is another word for: a.identical. b.homogeneous. c.heterogeneous. d.None of these has the same meaning.

C

A firm's average costs will be falling whenever its: a.marginal costs are positive. b.marginal costs are negative. c.marginal costs are less than average costs. d.marginal costs are less than fixed costs.

C

A monopolist maximizes its profits by selling up to the point where: a.its price equals its marginal cost. b.its price equals its marginal revenue. c.its marginal revenue equals its marginal costs. d.the difference between its price and average cost is maximized.

C

A monopolistic competitive firm: a.will always earn monopoly profits. b.will never earn monopoly profits. c.may earn monopoly profits in the short run. d.may earn monopoly profits in the long run.

C

If a firm has an average total cost of $55 and an average fixed cost of $10 for producing 5 units of output, then the total variable cost will be: a.$550. b.$525. c.$225. d.$65.

C

In a duopoly where products are differentiated and firms charge different prices, the demand curves are _______________ than if the firms sell identical products at the same price. a.steeper b.farther to the right c.more elastic (flatter) d.less elastic

C

In the long run, a monopolistically competitive firm: a.will earn normal profits. b.will earn excess profits. c.will earn no profits. d.will produce where marginal cost equals price.

C

In the long run, international trade allows a monopolistically competitive firm an opportunity: a.to produce more output and earn monopoly profits. b.to produce less output and earn monopoly profits. c.to produce more output and reduce its average costs. d.to produce less output and increase its average costs.

C

In the long run, profits in a monopolistic competition market are zero because: a.of government regulations. b.of collusion. c.firms are free to enter and exit the market. d.firms produce a differentiated product.

C

In the short run, in equilibrium, firms that operate in a monopolistically competitive market face a down sloping demand curve and will charge a price where _____ and ______. a.quantity produced is maximized; costs are minimized b.sales revenue is maximized; costs are falling c.MR = MC; P > average cost d.average costs are rising; sales are rising

C

Larger countries will trade more with one another; this is empirically supported by: a.the intra-industry trade. b.the increasing returns to scale. c.the gravity equation. d.the comparative advantage.

C

Other things equal, the gravity equation predicts that the United States will have more trade with __________ than with _________. a.Bangladesh; Japan b.Russia; Japan c.Canada; Bangladesh d.Russia; Bangladesh

C

P = 10 - Q If the firm's marginal cost is a constant $2 per unit, what price will it charge and how many units will it produce if it maximizes its profits? a.$8 and 2 units b.$7 and 3 units c.$6 and 4 units d.$5 and 5 units

C

Products traded between two nations that are very similar and very close substitutes, but that may be of different quality or prices, are called: a.differentiated complements. b.differentiated substitutes. c.differentiated products. d.perfect substitute products.

C

Since NAFTA was signed, Mexico saw the productivity of its firms: a.decrease in the nonmaquiladora plants. b.decrease in the maquiladora plants. c.increase in the maquiladora plants at a faster pace than in the nonmaquiladora plants. d.increase in the maquiladora plants at a slower pace than in the nonmaquiladora plants.

C

Studies of U.S.-Canadian free trade have concluded that the number of new jobs created in Canadian manufacturing were _________ the number of jobs lost elsewhere in Canadian manufacturing due to free trade. a.less than b.equal to c.greater than d.substantially greater than

C

The ____________ model best explains intra-industry trade. a.Ricardian b.Heckscher-Ohlin c.monopolistic competition d.specific-factors

C

The demand curve facing a monopolistic competitor: a.is perfectly inelastic. b.is perfectly elastic. c.slopes downward to the right. d.has a positive slope.

C

To analyze intra-industry trade, we must bring in imperfect competition, and we change our assumptions about our trade models to allow: a.price-conscious consumers. b.short-run unemployment. c.differentiated products. d.perfect competition.

C

To analyze monopolistic competition in trade, we make several assumptions about the market. Which of the following is NOT an assumption of monopolistic competition? a.many firms in the industry b.easy entry and exit c.constant long-run average cost d.increasing returns to scale, falling long-run average cost

C

U.S. Trade Adjustment Assistance: a.is not available to workers in manufacturing. b.is not available to workers displaced by NAFTA. c.is not available to workers in service industries. d.expired with the advent of the WTO in 1995.

C

Using a model of imperfect competition, economist Daniel Trefler concluded that the North American Free Trade Agreement: a.cost Canada more than 100,000 jobs that were never replaced. b.presented no real issue about job loss in Canada. c.caused Canada to lose 5% of jobs in manufacturing because Canadian tariffs had to be cut, but over time the trade agreement created higher productivity and more jobs to offset losses. d.created new jobs in Canada from day one, as firms sold across the border and undercut U.S. firms.

C

What is the expected outcome when trade occurs in a monopolistically competitive industry if the nations have similar tastes, technology, products, and costs? a.No trade is possible. b.Consumers are left with no choices. c.Each firm has a larger market in which to sell, and consumers have more choices of sellers and products. d.Transportation costs become the driving factor.

C

What is the value of the index of intra-industry trade for an industry in which exports are $100 million and imports are $200 million? a.100/300 = 0.33 b.(100 + 200)/100 = 3.00 c.100/[1/2 × (100 + 200)] = 0.67 d.100/200 = 0.50

C

What is the value of the intra-industry trade index for an industry in which exports are $100 million and imports are $100 million? a.100/200 = 0.50 b.(100 + 100)/100 = 2.00 c.100/[1/2 × (100 + 100)] = 1.00 d.(100 - 100)/100 = 0.00

C

What is the value of the intra-industry trade index for an industry in which exports are $200 million and imports are $20 million? a.2.00 b.(200 + 20)/20 = 11.00 c.20/[1/2 × (200 + 20)] = 0.18 d.(200 - 20)/200 = 0.90

C

What term is used to describe situations where countries specialize in and trade different varieties of the same type of product? a.comparative advantage b.the Heckscher-Ohlin model c.intra-industry trade d.increasing returns to scale

C

Which of the following features is characteristic of monopolistic competition? a.many large producers b.homogeneous products c.differentiated products d.No individual producer has any influence on the market price.

C

Which of the following is NOT a reason for Canada to join NAFTA? a.Canadian firms can expand their markets by selling to the United States and Mexico. b.Canadian firms can enjoy lower average costs by producing more. c.Canada did not want U.S. products to dominate its domestic market. d.Canada will see an increase in income and employment by joining NAFTA.

C

Which of the following is the calculation that tells us the proportion of trade in each product involving both imports and exports? a.the index of overlapping production b.the index of effective trade c.the index of intra-industry trade d.the index of displacement

C

Which of the following is the gravity equation calculation? a.the inverse of the average GDPs times transportation costs b.the sum of GDPs times total exports c.the product of the GDPs in two nations divided by a measure of the distance between them times a constant, reflecting other factors affecting trade d.the product of the land mass of the two nations divided by the average of their GDPs times a constant factor, reflecting other factors affecting trade

C

Which of the following is the term describing very similar products being exported and imported by trading partners? a.reciprocal trade b.imperfect competition c.intra-industry trade d.inter-industry trade

C

A monopolistically competitive firm faces demand given by this equation: P = 50 ​Q. It has no fixed costs and its marginal cost is $20 per unit What price will the firm charge when it is maximizing its profits? a.$20 b.$25 c.$30 d.$35

D

A monopolistically competitive firm faces demand given by this equation: P = 50 ​Q. It has no fixed costs and its marginal cost is $20 per unit. What is the value of the firm's monopoly profits when it sets a price that maximizes its monopoly profits? a.$125 b.$300 c.$425 d.$225

D

Adjustment costs include: a.dealing with child labor issues. b.human rights. c.getting used to foreign products. d.short-term unemployment.

D

Approximately how many U.S. workers received Trade Adjustment Assistance from 1994 to 2002 as a result of job losses due to NAFTA? a.525 million b.52.5 million c.5.25 million d.0.525 million

D

Consider the following cost information for a monopolist: its MR = $15, its MC = $23, and it is producing 9 units of output. Which of the following statements is correct? a.The monopolist should produce and sell 9 units of output. b.The monopolist should increase production of output. c.We need more information to decide if the firm needs to produce. d.The monopolist should not produce this output because MR < MC.

D

Consumers gain from trade within a monopolistically competitive industry because: a.prices fall and product varieties decrease. b.prices rise and product varieties increase. c.prices rise and product varieties decrease. d.prices fall and product varieties increase.

D

Economist Jan Tinbergen developed a formula, called ______, to predict which nations would engage in bilateral trade. a.the trade deficit equation b.the index of equality c.the Tinbergen ratio d.the gravity equation of trade

D

For which of the following products would you expect the index of intra-industry trade to be lowest? a.golf clubs b.automobiles c.whiskey d.natural gas

D

If a firm in monopolistic competition lowers its price, what will happen to the quantity of products it sells? a.The quantity of products sold will increase and sales revenue will fall. b.The quantity of products sold will decrease because this is not perfect competition. c.The quantity of products sold will increase slightly—and in some cases not at all. d.The quantity of products sold and sales revenues will increase as the firm lures customers from its competitors and attracts new customers.

D

If the index of intra-industry trade for an industry is zero, then: a.exports and imports in that industry are equal. b.there are no exports in that industry. c.there are no imports in that industry. d.there is no trade in that industry.

D

Which of the following will NOT cause increasing returns to scale and declining average costs? a.focusing on a single product line and specializing b.exporting goods to other countries c.selling more in their home market d.hiring more workers at the existing plant

D

In the short run, international trade allows a monopolistically competitive firm an opportunity: a.to produce more output. b.to earn monopoly profits. c.to reduce its average costs. d.to produce more output, earn monopoly profits, and reduce its average costs.

D

In what two ways does trade benefit consumers when firms are monopolistically competitive? a.better quality products, increased information b.higher incomes, more dependable products d.lots of bells and whistles, higher wages d.lower prices, more variety

D

NAFTA benefited Canadian consumers because: a.of higher wages and more travel opportunity. b.of lower wages but also lower taxes. c.of lower prices but lower quality. d.of lower prices and increased variety.

D

P = 10 - Q At what price is the firm's total revenue maximized? a.$9 b.$7 c.$5 d.$3

D

P = 10 - Q If the firm has no fixed costs and variable costs of $2 per unit, what is the value of the firm's monopoly profits when it sets a price that maximizes its monopoly profits? a.$7 b.$12 c.$15 d.$16

D

Select the best answer: A recap of the effects of NAFTA for its first 9 years reveals some adjustment costs were offset by: I. benefits for U.S. manufacturing productivity. II. benefits for U.S. consumers. III. benefits for higher-wage workers in Mexican maquiladora industries. a.I b.II c.III d.I, II, and III

D

The cross-trade of very similar products exported and imported by trading partners seems to contradict which of the following model(s)? a.Ricardian b.Heckscher-Ohlin c.specific-factors d.It contradicts all of these models.

D

To test the gravity equation of trade, a regression model was calculated for two nations, the United States and Canada, testing the correlation among: a.regional trade, size of GDP, and distance for states and provinces. b.intra-industry trade, size of GDP, and size of states and provinces. c.bilateral trade and ratio of GDP for states and provinces. d.bilateral trade, size of GDP, and distance for states and provinces.

D

U.S. unemployment caused by NAFTA over the years from 1994 to 2002: a.totaled 13% of manufacturing job loss in the United States during that period. b.was not permanent as most workers were re-employed within three years. c.was offset completely by increased product variety imports and lowered prices. d.totaled 13% of manufacturing job loss in the United States during that period was not permanent, as most workers were re employed within three years, and was offset completely by increased product variety imports and lowered prices.

D

Using data from Trade Adjustment Assistance claims, we can make an accurate estimate of: a.the variety of products U.S. consumers import from Mexico. b.U.S. exports to Mexico that give Mexican consumers more product variety. c.the barriers to trade erected by affected firms. d.the unemployment caused by NAFTA.

D

Which of the following is (are) factors affecting the constant in gravity equation estimates? I. tariffs and quotas II. customs' issues and finance and currency issues III. administrative barriers to trade a.I b.II c.III d.I, II, and III

D

Which of the following is NOT an assumption of monopolistic competition? a.Each firm's output is slightly different from other firms in the industry. b.There are many firms in the industry. c.Production occurs with increasing returns to scale technology. d.Each firm faces a perfectly elastic demand curve.

D