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Ch6_1 - Name Date 1 When research and development costs are...

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Name: ___________________________________ Date: ______________ 1. When research and development costs are spread out over more consumers, this is an example of what? 2. Why would you expect firms with high research and development costs to be more interested in free trade? 3. 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. 4. Products traded between two nations that are very similar and very close substitutes, but that may be of different quality or prices, are called: 5. The cross trade of very similar products exported and imported by trading partners seems to contradict which model(s)? 6. A differentiated product is one that: Page 1
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7. “Differentiated” is another word for: A) identical. B) homogeneous. C) heterogeneous. D) None of the answer choices are correct. 8. When a firm raises the price of a differentiated product in an imperfectly competitive market: 9. Which of the following features is characteristic of monopolistic competition? 10. Increasing returns to scale occur when a firm's: 11. 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
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