Econ 248 Final Test Questions With 100% Correct Answers.

Econ 248 Final Test Questions With 100% Correct Answers. The Heckscher-Ohlin theory predicts that trade between similar industrialized countries should - answerbe rather limited in volume. Scale economies are said to be present when - answeran increase in output leads to a decrease in average cost. Internal scale economies occur when - answerexpansion of output by a firm leads to greater specialization of labor. ________ is a market structure in which a large number of firms compete vigorously with each other in producing and selling different varieties of a basic product. - answermonopolistic competition When Firm X doubled its output, it was found that its cost per unit declined by 10 percent. It can be concluded that - answerthe firm was enjoying internal scale economies Which of the following is considered a capital inflow? A) A sale of U.S. financial assets to a foreign buyer B) A loan from a U.S. bank to a foreign borrower C) A purchase of foreign financial assets by a U.S. buyer D) A U.S. citizen's repayment of a loan from a foreign bank - answerA) External scale economies Which of the following refers to a two-way trade in which a country both exports and imports the same or very similar products? A) Net trade B) Inter-industry trade C) Intra-industry trade D) Internal trade - answerC) intra-industry trade Which of the following is the formula for the intra-industry trade (IIT) share in a product's total trade? A) 1 - |X - M| B) 1 - (X + M) C) 1 - [ |X - M| / (X + M)] D) 1 - [ |X + M| / (X - M)] - answerC) 1 - [ |X - M| / (X + M)] Suppose the amount of exports of textile machinery from Italy to the rest of the world equals 60 billion tons. The amount of imports of textile machinery into Italy from the rest of the world is 40 billion tons. Therefore, the intra-industry trade share for machinery is - answer0.8 Which of the following is true of intra-industry trade? A) Intra-industry trade is mostly based on the differences stressed in the Heckscher-Ohlin trade theory. B) Intra-industry trade is usually discouraged by the government. C) Intra-industry trade is said to occur when the United States exports Ford automobiles and imports Honda automobiles. D) Intra-industry trade is said to occur when the United States exports Ford automobiles and imports petroleum. - answerC) Intra-industry trade is said to occur when the United States exports Ford automobiles and imports Honda automobiles. Which of the following can help explain the rise of intra-industry trade? A) Recent recessions and increases in the price of oil have led to lower national income levels. B) The demand for product variety has increased substantially over time. C) Countries widely vary in terms of their resource endowments. D) The developed nations have recently implemented more conservative fiscal policies. - answerB) The demand for product variety has increased substantially over time. Which of the following indicates the difference between the volume of exports and imports of a product? A) Net trade B) Intra-industry trade C) Total trade D) Terms of trade - answerA) Net trade When the average cost of a typical firm declines as the output of the industry within a geographic area increases it is referred to as - answerExternal scale economies.