tbch06 - Chapter 6 Economies of Scale Imperfect Competition...

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Chapter 6: Economies of Scale, Imperfect Competition, and International Trade 1. External economies of scale arise when the cost per unit A. rises as the industry grows larger. B. falls as the industry grows larger rises as the average firm grows larger. C. falls as the average firm grows larger. D. remains constant. E. None of the above. Answer: B 2. Internal economies of scale arise when the cost per unit A. rises as the industry grows larger. B. falls as the industry grows larger. C. rises as the average firm grows larger. D. falls as the average firm grows larger. E. None of the above. Answer: D 3. External economies of scale 4. Internal economies of scale 5. A monopolistic firm 70
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6. Monopolistic competition is associated with A. cut-throat price competition. B. product differentiation. C. explicit consideration at firm level of the feedback effects of other firms' pricing decisions. D. high profit margins. E. None of the above. Answer: B 7. The most common market structure is 8. Modeling trade in monopolistic industries is problematic because 9. Where there are economies of scale, the scale of production possible in a country is constrained by
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