homework_3_sol

homework_3_sol - Problem Set 3 International Economics...

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Problem Set 3 International Economics (V31.0238) Spring 2008 Instructor: Vivian Z. Yue Multiple choice questions (4 points each, 44 points in total) 1. 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 2. 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.
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Answer: C 3. 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 4. 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 5. If a good is imported into (large) country H from country F, then the imposition of a tariff in country H (a) raises the price of the good in both countries (the “Law of One Price”). (b) raises the price in country H and cannot affect its price in country F.
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(c) lowers the price of the good in both countries. (d) lowers the price of the good in H and could raise it in F. (e) raises the price of the good in H and lowers it in F. Answer: E 6. The effective rate of protection measures (a) the “true” ad valorum value of a tariff. (b) the quota equivalent value of a tariff. (c) the efficiency with which the tariff is collected at the customhouse. (d) the protection given by the tariff to domestic value added. (e) None of the above. Answer: D 7. If a small country imposes a tariff, then (a) the producers must suffer a loss. (b) the consumers must suffer a loss.
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homework_3_sol - Problem Set 3 International Economics...

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