view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE’s
new<\/p>\n\n\n\n
view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist
evolutionary<\/p>\n\n\n\n
view that claims globalization is swinging from one extreme to another from time to time
pendulum<\/p>\n\n\n\n
investment in, controlling, and managing value-added activities in other countries
foreign direct investment<\/p>\n\n\n\n
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists and firms
radical<\/p>\n\n\n\n
suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods and services
free market<\/p>\n\n\n\n
views FDI as having pros and cons and only approving FDI when its benefits outweigh costs
pragmatic nationalis<\/p>\n\n\n\n
what benefits exist to a country receiving FDI?
capital inflow, technology spillovers, advanced management know-how, creates jobs<\/p>\n\n\n\n
what costs exist to a country receiving FDI?
loss of sovereignty, adverse effects on competition, net outflow in the capital account<\/p>\n\n\n\n
The aggregation of importing and exporting that leads to the country-level trade surplus or deficit.
balance of trade<\/p>\n\n\n\n
firms with a _<\/strong> degree of resource similarity are likely to have similar competitive actions a high degree of resource similarity but low market commonality = _<\/em><\/strong> intensity of rivalry little resource similarity but high market commonality = _<\/strong> intensity of rivalry mercantilism, absolute advantage and comparative advantage belong to what theory of international trade theory of international trade that relies on more realistic product life cycles and first mover advantages under free trade, a nation gains by specializing in economic activities in which it has _____advantage focuses on the idea that if a country does not have absolute advantage, they can still choose to specialize in the production of one good where it has __<\/strong> advantage comparative advantage and absolute advantage stem from theory that the wealth of the world is fixed and that a nation that imports more and exports less will be richer stage of the product life cycle where production of a new product that commands a price premium will concentrate in the US stage of the product life cycle where demand and ability to produce grow in other developed nations stage of the product life cycle where the previously new product is commoditized and production will now move to low-cost developing nations comparative advantage may change over time because patterns of __<\/strong> change over time theory that suggests that intervention by governments in certain industries can enhance their odds for international success if a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? exchange rate risk associating with the time delay between entering a contract and settling it forward transaction that protects traders and investors from exposure to fluctuations of the spot rate a means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions amount of resources committed to entering a foreign market how do institutions reduce uncertainty? pillar of formal institution, coercive power of government pillar of informal institution, the mechanism through which norms influence individual and firm behavior pillar of informal institution, taken for granted values and beliefs that guide behavior institutions represented by laws, regulations and rules institutions represented by norms, culture and ethics the necessity of making rational decisions in the absence of complete information bounded rationality is a position in which view of global business political system that affects global business with an individuals right to freedom of expression and organization political system that affects global business with hostility towards business, higher political risk such as nationalism political system where citizens elect representatives to govern the country on their behalf political system where one person or party exercises absolute political control over the population law that uses comprehensive statutes and codes as a primary means to form legal judgements law that is shaped by precedents and traditions from previous judicial decisions law that is based on religious teachings less confrontational, shorter, less specific form of law common law is __<\/strong> flexible than civil law the legal right to use an economic resource and to derive income and benefits from it legal rights awarded by government authorities to investors of new products or processes who are given monopoly rights to derive income from inventions exclusive legal rights of authors and publishers to publish and disseminate their work exclusive legal rights of firms to use specific names, brands and designs to differentiate their products characterized by the invisible hand of market forces where the government takes a hands off approach factors of production should be government owned or state owned and all supply, demand and pricing are planned by the government the economic system of most countries a curve that represents a consumers preferences indifference curves are preferred to __<\/em><\/strong> ones indifference curves are bowed __<\/strong> the rate at which a consumer is willing to substitute one good for another the limit on consumption bundles that a consumer can afford a piece of analysis that shows the combination of goods the consumer can afford given their income and price of goods an increase in income will shift the budget constraint __<\/em><\/strong> the slope of the indifference curve equals the slope of the the consumer chooses consumption of the two goods so that the marginal rate of substitution equals the the increase in total cost that results from adding an additional unit of production formula to calculate marginal cost a firm will produce the quantity where MR = MC as long as __<\/em><\/strong> when price falls below the AVC, what will a firm do? someone who has to take the market price of a product and accept it as their own price the demand curve for a perfectly competitive firm is the demand curve for a monopolistic market is where do firms with market power determine the quantity of product\/service they will produce? where will firms with price setting capacity maximize profits? a market with only a few sellers offering similar or identical products a firm is a sole seller of a product with no close substitutes many firms sell similar products but not identical. many firms compete for the same customers, free entry and exit many buyers and sellers, identical products, free entry and exit, perfect information, price taker what may rare, precious, and hard-to-duplicate resources and capabilities lead to for a firm? company strategies must consider actions by rival firms is a lesson learned from what what prevents oligopolistic firms from behaving like monopolies? oligopolies are best off when producing a _ quantity of output and charging a price _<\/strong><\/em><\/strong> marginal cost decrease in income _<\/em><\/strong> demand for normal goods decrease in income __<\/strong> demand for inferior goods increase in income _<\/strong> demand for inferior goods increase in income __<\/strong> demand for normal goods good in which people will purchase more of as their income increases good in which people will purchase less of as their income increases coke and pepsi are examples of hot dogs and hot dog buns are examples of normal and inferior goods, complements and substitutes, expectations about the future and tastes and number of buyers influence the position of the demand that is greater than one demand that is less than one how is income elasticity measured? a change in price will cause a large change in the quantity demanded a change in price will not cause a large change in the quantity demanded the percentage change in price is equal to the percentage change in quantity demanded necessities have a _<\/strong> income elasticity luxuries have a __<\/strong> income elasticity how the quantity demanded of one good changes in response to a change in the price of another good substitute goods have a __<\/strong> cross elasticity complementary goods have a _<\/strong> cross elasticity price elasticity of demand equation income elasticity of demand equation cross elasticity of demand equation tools the federal reserve has in regards to monetary control purchase or sale of US treasury or US government bonds in the open market when the fed buys bonds, what happens to the money supply and AD? when the fed sells bonds, what happens to the money supply and AD? the interest rate on loans that the Fed makes to the bank reducing the discount rate does what? increasing the discount rate does what? ratio of money that banks are required to hold whenever an entity deposits money with them when the reserve ratio is increased, what happens to the money supply and AD when the reserve ratio is decreased, what happens to the money supply and AD if the government uses fiscal policy and cuts taxes, what effect will this have on interest rates and AD? the difference between what a buyer is willing to pay for a good or service and what they actually pay consumer surplus is measured in the area _ the demand curve, ___<\/em><\/strong> the price, _<\/em><\/strong> the quantity consumed the benefit sellers receive from participating in a market producer surplus is measured in the area _ the supply curve,<\/strong><\/em><\/strong> the price, __<\/strong> the quantity supplied total surplus equation the study of economy wide phenomena such as inflation, unemployment and economic growth the study of how households and firms make decisions and how they interact in markets income must _<\/em><\/strong> expenditure in an economy the market value of all final goods and services produced within the border of a given country during a specified period of time gross domestic product measures what two things? 4 components of GDP<\/p>\n\n\n\n which payments are not counted in government expenditures? a tax on goods produced abroad and sold domestically a method used to restrict international trade by taxing imported goods the fall in total surplus that results from a tax financial environment in which exchange rates and payments for goods and services are conducted what happens to a country’s real exchange rate and nominal interest rate as the price level increases easiest method non financial companies use to handle currency fluctuations strategy that minimizes the risk of unanticipated changes in future exchange rates a non equity arrangement for a company contemplating entry into a foreign market What size commitment is required for a non-equity mode of entry into a foreign market? two supportive pillars of an informal institution reducing uncertainty is the key role of an institution according to which view the rules, enforcement mechanisms, and organizations that support market transactions are referred to as _<\/strong>. two polar types of economies in addition to improving efficiency, why might a government intervene in a market? what is the relationship between marginal cost and total cost? a seller maximize profits in a perfectly competitive market by producing the economic profit of a competitive firm is the difference between and<\/em> when average variable costs are above the price, what should a firm do? what is the producers demand curve when the producer sells a differentiated product? a competitive firms demand curve is __<\/strong> elastic than a monopoly’s demand curve at which point does a monopoly maximize profit? many firms and differentiated products if the consumers budget constraint has shifted inwards, the consumer will buy _ normal goods and _<\/strong><\/em><\/strong> inferior goods if there is an increase in market demand in a perfectly competitive market, equilibrium price will _ and equilibrium quantity will _<\/strong><\/em><\/strong> if both demand and supply decrease, what will happen to equilibrium price and quantity? the positive or negative numbers of cross price elasticity of demand represent what? enacting a permanent income tax cut is what kind of policy? an increase in the money supply will _ interest rates and _<\/strong><\/em><\/strong> AD A nation ends a tariff on bananas, which is an imported product. What will be the effect on banana prices within that nation? implementing a new tariff does what for the government? the idea that governments should actively protect domestic industries from imports and vigorously promote exports The classic single-shot exchange of one currency for another. allows participants to buy and sell currencies now for future delivery a foreign exchange transaction where one currency is converted into another currency diversification is also known as focuses on forward contracts and swaps to contain currency risks geographically dispersing operations through sourcing or FDI in multiple currency zones possession of natural resources and related transport and communication infrastructure abundance of strong market demand and customers willing to pay economies of scale and abundance of low cost factors abundance of innovative individuals, firms, and universities exports, licensing, and franchising are __<\/strong> entry modes partially owned subsidiaries, joint ventures, acquisitions, and greenfield operations are _<\/em> entry modes indicate a relatively larger, harder to reverse commitments tend to reflect relatively smaller commitments to overseas markets an MNE enters foreign markets via _<\/em><\/strong> modes through FDI ownership, location and internalization are 3 advantages of the rate at which a person can trade the currency of one country for the currency of another the rate at which a person can trade the goods and services of one country for the goods and services of another the relative price of the currency of two countries the relative price of the goods and services of two countries the production of goods and services valued at current prices the amount produced that is not affected by changes in prices Globalization Purchasing Power Parity (PPP) Scenario Planning Risk management Gross National Income (GNI) Gross National Product (GNP) reverse innovation International Business (IB) semiglobalization BRIC base of the pyramid (BOP) emerging economies emerging markets nongovernmental organizations (NGO’s) Expatriate Manager Gross Domestic Product (GDP) Foreign Direct Investment (FDI) Group of 20 (G-20) liability of foreignness global business international premium multinational enterprise (MNE) Triad Expatriate Manager (expat) Nontariff Barriers (NTB) tariff barrier deadweight costs free trade infant industry argument product life cycle theory theory of mercantilism theory of comparative advantage strategic trade theory merchandise (goods) services trade deficit factor endowments classical trade theories Comparative advantage export theory of national competitive advantage of industries import tariff resource mobility theory of absolute advantage balance of trade trade embargos factor endowment theory or Heckscher-Ohlin Theory opportunity cost import antidumping duties first-mover advantages absolute advantage modern trade theories subsidies Administrative policies voluntary export restraints (VER’s) Strategic Trade Policy local content requirements trade surplus import quotas protectionism Administrative policy Antidumping duty Deadweight cost dissemination risks management control rights Internalization technology spillovers sunk costs oligopoly free market view upstream vertical FDI OLI advantages pragmatic nationalism horizontal FDI FDI Outflow radical view market imperfections (market failure) Location FDI Stock downstream vertical FDI ownership Knowledge spillovers FDI inflow intrafirm trade bargaining power FDI flow agglomeration Foreign Portfolio Investment (FPI) demonstration effect expropriation obsolescing bargain blue ocean strategy predatory pricing antitrust law cartel competitor analysis capacity to punish market commonality resource similarity competition policy explicit collusion antitrust policy concentration ratio mutual forbearance antidumping laws competitive dynamics dodger defender multimarket competition price leader prisoners dilemma cross-market retaliation collusive price setting counterattack extender tacit collusion collusion game theory contender attack dumping antidumping law currency risks clean spread appreciation peg Bretton Woods System post-Bretton Woods System gold standard foreign exchange market bid rate quota spot transactions depreciation dirty fixed policy rate forward discount common denominator balance of payments forward premium target exchange rates offer rate capital flight currency swap currency board International Monetary Fund (IMF) strategic hedging foreign exchange rate bandwagon effect forward transactions floating clean (free) float dirty (managed) float fixed exchange rate policy floating (flexible) exchange rate policy target exchange rates (crawling bands) build-operate-transfer (BOT) agreement scale of entry co-marketing LLL Advantages Research and Development Contracts Wholly owned subsidiary (WOS) joint venture (JV) non-equity modes location specific advantages modes of entry turnkey projects institutional distance country of origin effect equity modes greenfield operations cultural distance scale of entry law of demand demand curve market demand normal good inferior good substitutes complements law of supply supply schedule supply curve equilibrium equilibrium price equilibrium quantity surplus shortage law of supply and demand elasticity price elasticity of demand income elasticity of demand cross-price elasticity of demand price elasticity of supply Money medium of exchange unit of account store of value liquidity commodity money gold standard fiat money currency demand deposits Federal Reserve central bank monetary policy reserves fractional reserve banking leverage leverage ratio capital requirement open-market operations discount rate fed funds rate welfare economics consumer surplus Views on Globalization “New” view on globalization “Evolutionary” view on globalization “Pendulum” view on globalization Foreign Direct Investment Political views on FDI Benefits to a country receiving FDI Costs to a country receiving FDI How do resources and capabilities influence the competitive dynamics of a business? Resource similarity How does resource similarity impact competitive dynamics? Classical theories of international trade Modern theory view Classical theory view Absolute advantage Comparative advantage Mercantilism Features of the product life cycle? Strategic trade How are supply and demand related to the exchange rate of a country? Which theory came first? If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? Transaction risk Hedging Currency hedging Strategic hedging First mover advantages Late mover advantages Foreign market entries types Non-equity Equity How do institutions reduce uncertainty? Regulatory pillar Normative pillar Cognitive pillar Formal institution Informal institution What core propositions lie at the root of the institution based view on global business? The institution based view global business is grounded upon How is global business affected by democracy? How is global business affected by totalitarianism? Democracy Totalitarianism Civil law Common law Theocratic law How do civil, common and theocratic laws compare? Property right Intellectual property right Market economy Command economy Mixed economy Indifference curve Four properties of an indifference curve Marginal rate of substitution. Budget constraint How might a budget constraint be impacted by an increase in income? Graphical elements needed to determine a consumer’s optimal point of consumption How is a consumer’s optimal point of consumption determined precisely? What is the condition that must be met? Marginal cost How is marginal cost related to total cost? Formula to calculate marginal cost If Dave’s company has a total cost of $100 when quantity output is 5, and a total cost of $115 when quantity output is 6, what is the marginal cost of producing the 6th unit? Total cost is made of two types of costs, what are they? How does a firm determine to shut down in the short-run? What rule characterizes this? Market structure characterized as being “price takers” Price taker When a market is characterized as being a price taker, what fundamental shape does the demand curve for this market take? Demand curve for a perfectly competitive firm Demand curve for a monopolistic market What does “downward” sloping with regards to a demand curve mean? Where do firms with market power determine the quantity of product\/service they will produce? Primary goal\/objective of a firm If the firm has price setting capacity, how will they use information about marginal costs and marginal revenues in order to accomplish their primary objective? Describe the basic distinctions between the market models with respect to: number of market participants, type of product being marketed, ease of entry\/exit into the market and the prevalence of advertising\/marketing Fundamental truth realized when studying the behavior of an oligopolistic firm within the context\/model called “prisoner’s dilemma” How might an oligopolistic firm behave like a monopoly? What forces may prevent this? Federal Reserve’s monetary control Open market operations When the Fed buys bonds, what impact does this have on the money supply and aggregate demand? When the Fed sells bonds, what impact does this have on the money supply and aggregate demand? Discount rate When the Fed reduces the discount rate, what impact will this have on the money supply and the aggregate demand? When the Fed increases the discount rate, what impact will this have on the money supply and the aggregate demand? Reserve ratio What would the Fed need to do with the reserve ratio in order to increase the money supply and aggregate demand in the economy? What would the Fed need to do with the reserve ratio in order to decrease the money supply and aggregate demand in the economy? If the Fed uses monetary policy in a way that increases money supply, what effect will this have on interest rates and aggregate demand (consider them separately)? If the government uses fiscal policy to increase government spending what impact will this have on interest rates and aggregate demand? If the government uses fiscal policy and cuts taxes, what effect will this have on interest rates and aggregate demand? Explain the effect an income change might have on shifting the demand curve? Normal good Inferior good Explain how the price of related goods is related to changes in the demand curve? If Luke and I are the only sellers of paper in a given market, and Luke drops his prices for paper, how will this impact the demand for my paper? Which way will the demand curve shift? What other factors might influence the position of the demand curve? Numerical value that determines whether or not a product\/service is considered price elastic versus inelastic Income elasticity Price elasticity of demand Elastic Inelastic Unit elastic Results from income elasticity Cross-price elasticity 3 types of elasticity, their equations, purpose and outcomes In the net, how are price (P) and quantity (Q) changed by a simultaneous increase in demand and supply? In the net, how are price (P) and quantity (Q) changed by a simultaneous increase in demand and decrease in supply? In the net, how are price (P) and quantity (Q) changed by a simultaneous decrease in demand and supply? In the net, how are price (P) and quantity (Q) changed by a simultaneous decrease in demand and increase in supply? Tariff. Dead weight loss. How are tariff’s and dead weight loss related? Explain. Two primary categories of trade barriers If an import tariff is imposed on coconuts that are imported into the U.S., how will this impact the price of coconuts for U.S. consumers? Why might a government be interested in imposing an import tariff on a good? What benefit would the government derive primarily? How would imposing an import tariff on cigars impact the domestic production of cigars? If an import tariff on coconuts was removed in the U.S., how would this impact the demand for coconuts by U.S. consumers? What would happen to the overall domestic demand for a good if an import tariff were imposed on that good? How does a tariff generally impact the following entities: consumers, producers, government? Compare the effects between the entities Consumer surplus Who receives consumer surplus? In relation to the demand curve and price, how is consumer surplus measured? Producer surplus Who receives producer surplus? In relation to the demand curve and price, how is producer surplus measured? How is total surplus determined? In what ways might government or policy makers make use of surplus measures? Macroeconomics Microeconomics Why must income equal expenditure in an economy as a whole? Gross domestic product (GDP) Four components of GDP Why are transfer payments such as social security not counted in government expenditures? Real GDP Nominal GDP Reason to measure GDP in real terms The term “emerging economies” has replaced the term The gross domestic product plus the income from non-resident sources abroad gives the Which of the following countries would be characterized as an emerging economy? More than 25% of global GDP comes from Viewing the global economy as a pyramid, the Triad refers to People who earn _<\/strong> a year comprise the base of the global economic pyramid. Which of the following would be an example of a top down innovation? Which of the following is true of the Group of 20 (G-20) Which of the following does the institution-based view of global business lay emphasis on? The resource-based view of global business differs from the institution-based view of global business in that the resource-based view _<\/strong> The liability of foreignness is the inherent disadvantage faced by _<\/strong> Which of the following is true of globalization according to the “new force” perspective? The concept of _<\/strong> suggests that barriers to market integration at borders are high, but not high enough to completely insulate countries from each other The strategy of treating each country as a unique market and in total isolation is referred to as _<\/strong> MNEs from the Triad dominate the list of the 500 largest MNEs; their share has been _<\/strong> The term “emerging economies” has replaced the term _<\/strong> A conversion that determines the equivalent amount of goods and services that different currencies can buy is known as _<\/strong> Which of the following countries would be characterized as an emerging economy? More than 25% of global GDP comes from _<\/strong> Which of the following countries is represented in the Triad of the global economic pyramid? People who earn _<\/strong> a year comprise the base of the global economic pyramid. A _<\/strong> is defined as an innovation that is adopted first in emerging economies and then diffused around the world Which of the following is true of the Group of 20 (G-20) The _<\/strong> view suggests that the success and failure of firms are largely determined by their environments The _<\/strong> view of global business focuses on internal factors that can help a firm overcome its external environment Which of the following is true of globalization according to the “pendulum view” perspective? The concept of _<\/strong> suggests that barriers to market integration at borders are high, but not high enough to completely insulate countries from each other. _<\/strong> is the strategy of treating the entire world as one market. Protectionism is similar to mercantilism as they both advocated _<\/strong>. The _<\/strong> principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports. Which of the following is a modern trade theory? Which of the following trade theories divides the nations of the world into three categories? Which of the following was the first international trade theory to account for changes in the patterns of trade over time? In the third stage of the product life cycle theory, the _<\/strong>. Which of the following describes resource mobility as assumed by the classical theories of international trade? The theory of comparative advantage _<\/strong>. Deadweight costs are net losses that occur when _<\/strong> are imposed. _<\/strong> are government payments to domestic firms. Which of the following is true of voluntary export restraints? Which of the following is true of voluntary export restraints? _<\/strong> are tariffs levied on imports sold below costs to drive domestic firms out of business. FPI refers to the _<\/strong>. A vertical FDI refers to a type of FDI in which _<\/strong> _<\/strong> refers to the total accumulation of inbound FDI in a country or outbound FDI from a country. OLI advantages refer to a firm’s quest for _____via FDI _<\/strong> refers to the replacement of cross-border markets with one firm locating in two or more countries. Firms prefer FDI to licensing because FDI_____ _<\/strong> refers to the clustering of economic activities in certain locations. The television industry in the United States is controlled by seven giant corporations: The Walt Disney Company, CBS Corporation, Viacom, Comcast, Hearst Corporation, Time Warner, and News Corporation. Thus, the television industry in the U.S. is a typical _<\/strong> industry. Which of the following economic perspectives on FDI has its principles rooted in Marxism? Which of the following is a benefit of FDI to home countries? _<\/strong> refers to the deal struck by MNEs and host governments, which change their requirements after the initial FDI entry Costs that a firm has to endure even when its investment turns out to be unsatisfactory are referred to as _<\/strong>. A _<\/strong> is the price of one currency, such as the dollar, in terms of another, such as the euro. Which of the following conditions will attract foreign funds into a country? _<\/strong> is a country’s international transaction statement, which includes merchandise trade, service trade, and capital movement. Which of the following types of exchange rate policies is apt for a pure free market economy? The fixing of East and West Germany’s currencies at a 1:1 ratio to each other during the German unification in 1990 is an example of a _<\/strong>. In foreign exchange, a(n) _<\/strong> is said to have occurred when investors move in the same direction at the same time, like a herd. Between 1870 and 1914, the value of most major currencies was maintained by fixing their prices in terms of _<\/strong>. Which of the following was true of the Bretton Woods system? The weight a member country carries within the IMF, which determines the amount of its financial contribution, its capacity to borrow from the IMF, and its voting power is referred to as a(n) _<\/strong>. _<\/strong> allow participants to buy and sell currencies now for future delivery. _<\/strong> is defined as the conversion of one currency into another at Time 1, with an agreement to revert it back to the original currency at a specific Time 2 in the future. _<\/strong> refers to non-financial companies spreading out its activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions. A currency board is a monetary authority that issues notes and coins convertible into a key foreign currency at a _<\/strong> exchange rate. A manager arguing against currency hedging would most likely argue that _<\/strong>. Liability of foreignness is _<\/strong>. _<\/strong> refers to the clustering of economic activities in certain locations. Which of the following conforms to the notion put forward by the school of thought associated with stage models? Which of the following is a first-mover advantage? _<\/strong> refers to the amount of resources committed to entering a foreign market. The distinction between _<\/strong> is what defines an MNE from a firm that merely exports or imports. Which of the following is a non-equity mode of entry? Which of the following entry modes is a type of strategic alliance? Which of the following is an advantage of R&D contracts? Which of the following is true of indirect exports? A(n) _<\/strong> is a non-equity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm. Greenfield operations are similar to acquisitions in that they are both examples of _<\/strong>. The country-of-origin effect refers to _<\/strong>. The process of anticipating rivals’ actions in order to both revise a firm’s plan and prepare to deal with rivals’ response is called _<\/strong>. _<\/strong> occurs when firms engage the same rivals in numerous markets. Which of the following industry characteristics contributes to collusion? Which of the following is defined as the degree of overlap between two rivals’ markets? __<\/em> is an attack on a competitor’s other markets if this competitor attacks a firm’s original market The act of setting prices below cost to eliminate rivals while intending to raise them in the long run to make up for the initial losses is known as _<\/strong>. A _<\/strong> antirust policy would protect established firms that have already invested and nurtured an industry from new entrants. Which combination of resource similarity and market commonality results in the most intense competition? Which of the following sets of words describes the initial set of actions a firm uses to gain competitive advantage and the other firm’s response to it? __<\/em> best suits situations where the pressures to globalize are relatively low, and local firms’ strengths lie in a deep understanding of local markets. If a firm is operating in an environment with a high pressure for globalization, which of the following is the most preferred strategy? If a firm is operating in an environment that is customized to home market, which of the following is the most preferred strategy? If a seller in a competitive market chooses to charge more than the going price, then An increase in the price of a good will Which of the following demonstrates the law of demand? The line that relates the price of a good and the quantity demanded of that good is called the demand If the demand for a good falls when income falls, then the good is called Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are Two goods are complements when a decrease in the price of one good Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see The shift from Da to Db is called The law of supply states that, other things equal, when the price of a good The movement from point A to point B on the graph is called Which of the following changes would not shift the supply curve for a good or service<\/p>\n\n\n\n A change in the price of the good or service<\/p>\n\n\n\n A improvement in production technology will shift the Which of the following events could cause an increase in the supply of ceiling fans? Equilibrium quantity must decrease when demand Which of the following would not increase in response to a decrease in the price of ironing boards? A yard sale is an example of a market. For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? Suppose demand is perfectly elastic, and the supply of the good in question decreases. As a result, Which of the following could be the price elasticity of demand for a good for which a decrease in price would increase total revenue? If the demand for donuts is elastic, then a decrease in the price of donuts will For which of the following goods is the income elasticity of demand likely highest? You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles, yours would If the cross-price elasticity of two goods is negative, then the two goods are Suppose the demand function for good X is given by: Qdx = 15 \u2212 0.5Px \u2212 0.8Py where Qdx is the quantity demanded of good X, Px is the price of good X, and Py is the price of good Y, which is related to good X.<\/p>\n\n\n\n Using the midpoint method, if the price of good X is constant at $10 and the price of good Y decreases from $10 to $8, the cross-price elasticity of demand is about<\/p>\n\n\n\n \u22122.57, and X and Y are complements<\/p>\n\n\n\n Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct? Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15 percent, then the quantity supplied of cheese will increase by Which of the following statements is valid when the market supply curve is vertical? The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10 percent.<\/p>\n\n\n\n The equilibrium quantity will Which of the following was not a reason OPEC failed to keep the price of oil high?<\/p>\n\n\n\n The agreement OPEC members signed allowed each country to produce as much oil as each wanted.<\/p>\n\n\n\n Which of the following statements is not correct?<\/p>\n\n\n\n The quantity of illegal drugs demanded is very responsive to changes in price.<\/p>\n\n\n\n Demand is said to be price elastic if For a good that is a luxury, demand The demand for grape-flavored Hubba Bubba bubble gum is likely Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 and, as a result, the quantity of bags demanded increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is When the demand for a good increases and the supply of the good remains unchanged, consumer surplus A seller’s opportunity cost measures the Producer surplus is Which of the following will cause an increase in producer surplus? We can say that the allocation of resources is efficient if A simultaneous increase in both the demand for tablets and the supply of tablets would imply that A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it The particular price that results in quantity supplied being equal to quantity demanded is the best price because it You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your next-best alternative activity. Tickets to see Willie Nelson cost $40. On any given day, you would be willing to pay up to $50 to see and hear Willie Nelson perform. Assume there are no other costs of seeing either event. Based on this information, at a minimum, how much would you have to value seeing the Cubs play the White Sox to accept the ticket and go to the game? Henry is willing to pay 45 cents, and Janine is willing to pay 55 cents, for 1 pound of bananas. When the price of bananas falls from 50 cents a pound to 40 cents a pound, Suppose there is an early freeze in California that reduces the size of the lemon crop. As the price of lemons rises, what happens to consumer surplus in the market for lemons? Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible? When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy, For a small country called Boxland, the equation of the domestic demand curve for cardboard is Q D = 200 \u2212 2P , where Q D represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is Q S = -60 + 3P , where Q S represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard.<\/p>\n\n\n\n If Boxland prohibits international trade in cardboard, then the equilibrium price of a ton of cardboard is<\/p>\n\n\n\n $52 and the equilibrium quantity of cardboard is 96 tons.<\/p>\n\n\n\n For a small country called Boxland, the equation of the domestic demand curve for cardboard is Q D = 200 \u2212 2P , where Q D represents the domestic quantity of cardboard demanded, in tons, and P represents the price of a ton of cardboard. For Boxland, the equation of the domestic supply curve for cardboard is Q S = -60 + 3P , where Q S represents the domestic quantity of cardboard supplied, in tons, and P again represents the price of a ton of cardboard.<\/p>\n\n\n\n Suppose the world price of cardboard is $45. Then Boxland\u2019s gains from international trade in cardboard amount to<\/p>\n\n\n\n $122.50<\/p>\n\n\n\n Which of the following is not a commonly-advanced argument for trade restrictions?<\/p>\n\n\n\n The efficiency argument<\/p>\n\n\n\n The problem with the protection-as-a-bargaining-chip argument for trade restrictions is The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that Suppose Brazil has an absolute advantage over other countries in producing almonds, but other countries have a comparative advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil When the nation of Duxembourg allows trade and becomes an importer of software, Cindy’s Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm’s total cost is Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when four units of output are produced, the total cost is $175, and the average variable cost is $33.75. What would the average fixed cost be if ten units were produced? Average total cost is increasing whenever In the short run, a firm that produces and sells house paint can adjust The most likely explanation for economies of scale is In the long run a company that produces and sells popcorn incurs total costs of $1,050 when output is 90 canisters and $1,200 when output is 120 canisters. The popcorn company exhibits When a firm experiences diseconomies of scale, Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. Total profit for Billy’s Bean Bag Emporium would be Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she withdrew $20,000 from her savings, which earned 5 percent interest. She also turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui’s economic profit from running her own business? Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year.<\/p>\n\n\n\n Suppose Korie purchases the factory using $200,000 of her own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Korie’s annual opportunity cost of purchasing the factory? If a firm uses labor to produce output, the firm’s production function depicts the relationship between Ms. Joplin sells colored pencils. The colored-pencil industry is competitive. Ms. Joplin hires a business consultant to analyze her company’s financial records. The consultant recommends that Ms. Joplin increase her production. The consultant must have concluded that , at her current level of production, Ms. Joplin’s Cold Duck Airlines flies between Tacoma and Portland. The company leases planes on a year-long contract at a cost that averages $600 per flight. Other costs (fuel, flight attendants, etc.) amount to $550 per flight. Currently, Cold Duck’s revenues are $1,000 per flight. All prices and costs are expected to continue at their present levels. If it wants to maximize profit, Cold Duck Airlines should Assume a certain firm in a competitive market is producing Q = 1,000 units of output. At Q = 1,000, the firm’s marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit.<\/p>\n\n\n\n At Q = 1,000, the firm’s profits equal<\/p>\n\n\n\n $1,000<\/p>\n\n\n\n The information below applies to a competitive firm that sells its output for $40 per unit.<\/p>\n\n\n\n When the firm produces 150 units of output, its profit is The information below applies to a competitive firm that sells its output for $40 per unit.<\/p>\n\n\n\n Suppose the firm is currently producing and selling 150 units of output. Should the firm increase its output to 151 units? The short-run supply curve for a firm in a perfectly competitive market is A firm that shuts down temporarily has to pay The competitive firm’s long-run supply curve is that portion of the marginal cost curve that lies above average If there is an increase in market demand in a perfectly competitive market, then in the short run Suppose a firm in each of the two markets listed below were to increase its price by 25 percent. In which pair would the firm in the first market listed experience a dramatic decline in sales, but the firm in the second market listed might not? When firms are said to be price takers, it implies that if a firm raises its price, If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will The fundamental source of monopoly power is A natural monopoly occurs when When a firm has a natural monopoly, the firm’s When a monopolist increases the amount of output that it produces and sells, average revenue A monopolist’s profits with price discrimination will be When deciding what price to charge consumers, the monopolist may choose to charge them different prices based on the customers’ A perfectly price-discriminating monopolist is able to Antitrust laws have economic benefits that outweigh the costs if they If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will Which of the following is true about a monopolistically competitive firm? When a monopolistically competitive firm raises its price, When a profit-maximizing firm in a monopolistically competitive market charges a price higher than marginal cost, When a market is monopolistically competitive, the typical firm in the market is likely to experience a In monopolistically competitive markets, free entry and exit suggests that all firms earn zero economic profits in the long run. If a firm in a monopolistically competitive market successfully uses advertising to decrease the elasticity of demand for its product, the firm will According to one theory, advertising sends a signal to consumers about the quality of the product being offered. An implication of this theory is that Which of the following statements about oligopolies is not correct?<\/p>\n\n\n\n Unlike monopolies and monopolistically competitive markets, oligopolies prices do not exceed their marginal costs<\/p>\n\n\n\n As the number of sellers in an oligopoly becomes very large, When an oligopoly market reaches a Nash equilibrium, As the number of firms in an oligopoly increases, Suppose that Thierry and Abdul are duopolists. Thierry is producing 700 units of output, and Abdul is producing 500 units of output. When Abdul produces 500 units, Thierry maximizes profit by producing 700 units. When Thierry produces 700 units of output, Abdul maximizes profit by producing 500 units. Thierry and Abdul are Juan Pablo and Zak are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $8,000. If they both advertise on radio, each will earn a profit of $14,000. If neither advertises at all, each will earn a profit of $20,000. If one advertises on TV and other advertises on radio, then the one advertising on TV will earn $12,000 and the other will earn $10,000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $22,000 and the other will earn $4,000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $24,000 and the other will earn $8,000. If both follow their dominant strategy, then Juan Pablo will Assume that Samorola has entered into an enforceable resale price maintenance agreement with Trint and U-Mobile. Which of the following will always be true? Assume that a local restaurant sells two items, salads and steaks. The restaurant’s only two customers on a particular day are Mr. Carnivore and Ms. Leafygreens. Mr. Carnivore is willing to pay $20 for a steak and $7 for a salad. Ms. Leafygreens is willing to pay only $8 for a steak, but is willing to pay $12 for a salad. Assume that the restaurant can provide each of these items at zero marginal cos<\/p>\n\n\n\n If the restaurant is unable to use tying, what is the profit-maximizing price to charge for a steak? Liana consumes only beer and chips. Her indifference curves are all bowed inward. Consider the bundles (2,6), (4,4), and (6,2). If Liana is indifferent between (2,6) and (6,2), then Liana must Bundle J contains 10 units of good X and 5 units of good Y. Bundle K contains 5 units of good X and 10 units of good Y. Bundle L contains 10 units of good X and 10 units of good Y. Assume that the consumer’s preferences satisfy the four properties of indifference curves. The price of X is $1, the price of Y is $2, and the consumer has an income of $20. Which bundle will the consumer choose? A consumer consumes two normal goods, popcorn and Pepsi. The price of Pepsi rises. The substitution effect, by itself, suggests that the consumer will consume Ryan experiences an increase in her wages. The hours of labor that she supplies to the market would increase if The basic tools of supply and demand are For an economy as a whole In the actual economy, households In order to include many different goods and services in an aggregate measure, GDP is computed using, primarily Most goods and services produced at home A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely U.S. GDP and U.S. GNP are related as follows: National income differs from net national product because Disposable personal income is The Carters’ oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as Unemployment compensation is Changes in real GDP reflect Changes in the GDP deflator reflect If in some year nominal GDP was $20 billion and the GDP deflator was 50, what was real GDP? GDP per person tells us the income and expenditure of the International data on GDP and socioeconomic variables The existence of money leads to Which of the following is not a function of money?<\/p>\n\n\n\n Protection against inflation<\/p>\n\n\n\n You saved $500 in currency in your piggy bank to purchase a new laptop. The $500 you kept in your piggy bank illustrates money’s function as a . The laptop’s price is posted as $500. The $500 price illustrates money’s function as a . You use the $500 to purchase the laptop. This transaction illustrates money’s function as a <\/strong><\/em><\/strong><\/em>. The measure of the money stock called M1 includes If traveler’s checks were $1000 higher and saving deposits were $500 higher, M1 would be When conducting an open-market purchase, the Fed A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $150. If customers deposit $50 into the bank, what is the value of the money supply? A bank has an 8 percent reserve requirement, $10,000 in deposits, and has loaned out all it can, given the reserve requirement. If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it If the reserve ratio is 5 percent, then $500 of additional reserves would ultimately generate Which of the following increase when the Fed makes open market purchases? The banking system currently has $10 billion of reserves, none of which are excess. People hold only deposits and no currency, and the reserve requirement is 10 percent. If the Fed raises the reserve requirement to 12.5 percent and at the same time buys $1 billion worth of bonds, then by how much does the money supply change? Which of the following will help to prevent bank runs? A goal of monetary policy and fiscal policy is to For the U.S. economy, which of the following is the most important reason for the downward slope of the aggregate-demand curve? While a television news reporter might state that “Today the Fed raised the federal funds rate from 1 percent to 1.25 percent, ” a more precise account of the Fed’s action would be as follows: When the Fed buys government bonds, the reserves of the banking system An increase in the money supply will In the short run, open-market purchases Take the following information as given for a small economy:<\/p>\n\n\n\n The multiplier for this economy is The government builds a new water-treatment plant. The owner of the company that builds the plant pays her workers. The workers increase their spending. Firms from which the workers buy goods increase their output. This type of effect on spending illustrates If net exports fall $40 billion, the MPC is 9\/11, and there is a multiplier effect but no crowding out and no investment accelerator, then<\/p>\n\n\n\n aggregate demand falls by 11\/2 \u00d7 $40 billion<\/p>\n\n\n\n If a $1,000 increase in income leads to an $800 increase in consumption expenditures, then the marginal propensity to consume is When taxes decrease, interest rates Suppose there is a tax increase. To stabilize output, the Federal Reserve could Critics of stabilization policy argue that view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE’snew view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always existevolutionary view that claims globalization is swinging from one extreme […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[],"tags":[],"class_list":["post-110186","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/110186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=110186"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/110186\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=110186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=110186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=110186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
high<\/p>\n\n\n\n
highest<\/p>\n\n\n\n
lowest<\/p>\n\n\n\n
classical<\/p>\n\n\n\n
modern<\/p>\n\n\n\n
absolute<\/p>\n\n\n\n
comparative<\/p>\n\n\n\n
factor endowments<\/p>\n\n\n\n
mercantilism<\/p>\n\n\n\n
new<\/p>\n\n\n\n
maturing<\/p>\n\n\n\n
standardized<\/p>\n\n\n\n
trade<\/p>\n\n\n\n
strategic trade<\/p>\n\n\n\n
currency hedging<\/p>\n\n\n\n
transaction risk<\/p>\n\n\n\n
hedging<\/p>\n\n\n\n
strategic heding<\/p>\n\n\n\n
scale of entry<\/p>\n\n\n\n
by signaling which conduct is legit and which is not<\/p>\n\n\n\n
regulatory<\/p>\n\n\n\n
normative<\/p>\n\n\n\n
cognitive<\/p>\n\n\n\n
formal<\/p>\n\n\n\n
informal<\/p>\n\n\n\n
bounded rationality<\/p>\n\n\n\n
institution<\/p>\n\n\n\n
democracy<\/p>\n\n\n\n
totalitarianism<\/p>\n\n\n\n
democracy<\/p>\n\n\n\n
totalitarianism<\/p>\n\n\n\n
civil<\/p>\n\n\n\n
common<\/p>\n\n\n\n
theocratic<\/p>\n\n\n\n
civil<\/p>\n\n\n\n
more<\/p>\n\n\n\n
property right<\/p>\n\n\n\n
patent<\/p>\n\n\n\n
copyright<\/p>\n\n\n\n
trademark<\/p>\n\n\n\n
market<\/p>\n\n\n\n
command<\/p>\n\n\n\n
mixed economy<\/p>\n\n\n\n
indifference curve<\/p>\n\n\n\n
higher, lower<\/p>\n\n\n\n
inward<\/p>\n\n\n\n
marginal rate of substitution<\/p>\n\n\n\n
budget constraint<\/p>\n\n\n\n
budget constraint<\/p>\n\n\n\n
outward<\/p>\n\n\n\n
budget constraint<\/p>\n\n\n\n
relative price<\/p>\n\n\n\n
marginal cost<\/p>\n\n\n\n
change in total cost \/ change in quantity<\/p>\n\n\n\n
price > AVC<\/p>\n\n\n\n
shut down temporarily<\/p>\n\n\n\n
price taker<\/p>\n\n\n\n
horizontal<\/p>\n\n\n\n
downward sloping<\/p>\n\n\n\n
quantity where MR = MC, quantity where P = MC<\/p>\n\n\n\n
intersection between the marginal cost curve and the marginal revenue curve<\/p>\n\n\n\n
oligopoly<\/p>\n\n\n\n
monopoly<\/p>\n\n\n\n
monopolistic competition<\/p>\n\n\n\n
perfectly competitive<\/p>\n\n\n\n
sustained comparative advantage<\/p>\n\n\n\n
prisoners dilemma about oligopoly<\/p>\n\n\n\n
antitrust laws<\/p>\n\n\n\n
small, above<\/p>\n\n\n\n
decreases<\/p>\n\n\n\n
increases<\/p>\n\n\n\n
decreases<\/p>\n\n\n\n
increases<\/p>\n\n\n\n
normal good<\/p>\n\n\n\n
inferior good<\/p>\n\n\n\n
substitutes<\/p>\n\n\n\n
complements<\/p>\n\n\n\n
demand curve<\/p>\n\n\n\n
elastic<\/p>\n\n\n\n
inelastic<\/p>\n\n\n\n
percentage change in quantity demanded \/ percentage change in income<\/p>\n\n\n\n
elastic<\/p>\n\n\n\n
inelastic<\/p>\n\n\n\n
unit-elastic<\/p>\n\n\n\n
small<\/p>\n\n\n\n
large<\/p>\n\n\n\n
cross-price elasticity<\/p>\n\n\n\n
positive<\/p>\n\n\n\n
negative<\/p>\n\n\n\n
% change in quantity demanded \/ % change in price<\/p>\n\n\n\n
% change in quantity demanded \/ % change in income<\/p>\n\n\n\n
% change in quantity demanded of Y \/ % change in price of X<\/p>\n\n\n\n
open market operations, discount rates, reserve ratios<\/p>\n\n\n\n
open market operations<\/p>\n\n\n\n
increases money supply and shifts AD to the right<\/p>\n\n\n\n
decreases money supply and shifts AD to the left<\/p>\n\n\n\n
discount rate<\/p>\n\n\n\n
increases money supply, increases AD<\/p>\n\n\n\n
decreases money supply, decreases AD<\/p>\n\n\n\n
reserve ratio<\/p>\n\n\n\n
decreases, shifts to the left<\/p>\n\n\n\n
increases, shifts to the right<\/p>\n\n\n\n
cutting taxes will increase demand for money, increase interest rates and cause AD to shift to the right<\/p>\n\n\n\n
consumer surplus<\/p>\n\n\n\n
under DC, above price, up to quantity consumed<\/p>\n\n\n\n
producer surplus<\/p>\n\n\n\n
above, below price, up to<\/p>\n\n\n\n
value to buyers – cost to sellers<\/p>\n\n\n\n
macroeconomics<\/p>\n\n\n\n
microeconomics<\/p>\n\n\n\n
equal<\/p>\n\n\n\n
gross domestic product<\/p>\n\n\n\n
total amount of expenditures and total income of everyone in the economy<\/p>\n\n\n\n\n
transfer payments, social security<\/p>\n\n\n\n
tariff<\/p>\n\n\n\n
tariff<\/p>\n\n\n\n
deadweight loss<\/p>\n\n\n\n
international monetary system<\/p>\n\n\n\n
exchange rates depreciate, interest rates increase<\/p>\n\n\n\n
currency diversification<\/p>\n\n\n\n
currency swap<\/p>\n\n\n\n
licensing<\/p>\n\n\n\n
small<\/p>\n\n\n\n
normative and cognitive<\/p>\n\n\n\n
institution based view<\/p>\n\n\n\n
institutions<\/p>\n\n\n\n
centrally planned and market<\/p>\n\n\n\n
to promote equality<\/p>\n\n\n\n
marginal cost is the change in total cost divided by the change in quantity<\/p>\n\n\n\n
the quantity where P = MC<\/p>\n\n\n\n
total revenue and total cost<\/p>\n\n\n\n
temporarily shut down<\/p>\n\n\n\n
downward sloping<\/p>\n\n\n\n
more<\/p>\n\n\n\n
where MC = MR<\/p>\n\n\n\n
monopolistic competition<\/p>\n\n\n\n
fewer normal goods and more inferior goods<\/p>\n\n\n\n
they will both increase<\/p>\n\n\n\n
quantity will decrease, but price can either increase or decrease<\/p>\n\n\n\n
complements and substitutes<\/p>\n\n\n\n
fiscal<\/p>\n\n\n\n
decrease, increase<\/p>\n\n\n\n
the market price will match the global market price<\/p>\n\n\n\n
increases tax revenues<\/p>\n\n\n\n
modern day protectionism<\/p>\n\n\n\n
spot transactions<\/p>\n\n\n\n
forward transactions<\/p>\n\n\n\n
currency swap<\/p>\n\n\n\n
strategic hedging<\/p>\n\n\n\n
currency hedging<\/p>\n\n\n\n
strategic hedging<\/p>\n\n\n\n
natural resource seeking<\/p>\n\n\n\n
market seeking<\/p>\n\n\n\n
efficiency seeking<\/p>\n\n\n\n
innovation seeking<\/p>\n\n\n\n
non-equity<\/p>\n\n\n\n
equity<\/p>\n\n\n\n
equity modes of entry<\/p>\n\n\n\n
non equity<\/p>\n\n\n\n
equity<\/p>\n\n\n\n
MNE’s<\/p>\n\n\n\n
nominal exchange rate<\/p>\n\n\n\n
real exchange rate<\/p>\n\n\n\n
nominal exchange rate<\/p>\n\n\n\n
real exchange rate<\/p>\n\n\n\n
nominal GDP<\/p>\n\n\n\n
real GDP<\/p>\n\n\n\n
The close integration of countries and peoples of the world.<\/p>\n\n\n\n
A conversion that determines the equivalent amount of goods and services that different currencies can purchase.<\/p>\n\n\n\n
A technique to prepare and plan for multiple scenarios (either high or low risk).<\/p>\n\n\n\n
The identification and assessment of risks and the preparation to minimize the impact of high-risk , unfortunate events.<\/p>\n\n\n\n
GDP + income from non-resident sources abroad. GNI is the term used by the World Bank and other international organizations to supersede the term GNP.<\/p>\n\n\n\n
GDP + income from non-resident sources abroad.<\/p>\n\n\n\n
An innovation that is adopted first in emerging economies and is then diffused around the world.<\/p>\n\n\n\n
(1) A business or firm that engages in international crossborder economic activities and\/or (2) the action of doing business abroad.<\/p>\n\n\n\n
A perspective that suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely.<\/p>\n\n\n\n
Brazil, Russia, India, and China<\/p>\n\n\n\n
Economies where people make less than $2,000 per capita per year.<\/p>\n\n\n\n
A term that has gradually replaced the term “developing countries” since the 1990’s.<\/p>\n\n\n\n
A term that is often used interchangeably with “emerging economies”<\/p>\n\n\n\n
An organization that is not affiliated with governments.<\/p>\n\n\n\n
A manager who works “abroad”, or “expat” for short.<\/p>\n\n\n\n
The sum of value added by resident firms, households, and governments<\/p>\n\n\n\n
Investment in, controlling, and managing value-added activities in other countries.<\/p>\n\n\n\n
The group of 19 major countries plus the European Union (EU) whose leaders meet on a biannual basis to solve global economic problems.<\/p>\n\n\n\n
The inherent disadvantage that foreign firms experience in host countries because of their non-native status.<\/p>\n\n\n\n
Business around the globe.<\/p>\n\n\n\n
A significant pay raise when working overseas.<\/p>\n\n\n\n
A firm that engages in foreign direct investment (FDI)<\/p>\n\n\n\n
North America, Western Europe, and Japan<\/p>\n\n\n\n
A manager who works abroad, or “expat” for short.<\/p>\n\n\n\n
Trade barrier that relies on nontariff means to discourage imports.<\/p>\n\n\n\n
Trade barrier that relies on tariffs to discourage imports.<\/p>\n\n\n\n
Net losses that occur in an economy as a result of tariffs.<\/p>\n\n\n\n
The idea that free market forces should determine how much trade with little or no government intervention.<\/p>\n\n\n\n
The argument that if domestic firms are as young as “infants”, in the absence of government intervention, they stand no chances of surviving and will be crushed by mature foreign rivals.<\/p>\n\n\n\n
A theory that accounts for changes in the patterns of trade over time by focusing on product life cycles.<\/p>\n\n\n\n
A theory that suggests that the wealth of the world is fixed and that a nation that exports more than imports less will be richer.<\/p>\n\n\n\n
A theory that focusses on the relative not the absolute advantage in one economic activity that one nation enjoys in comparison with other nations.<\/p>\n\n\n\n
A theory that suggests that strategic intervention by governments in certain industries can enhance their odds for international success.<\/p>\n\n\n\n
Tangible products being traded.<\/p>\n\n\n\n
Intangible services being traded.<\/p>\n\n\n\n
An economic condition in which a nation imports more than it exports.<\/p>\n\n\n\n
The extent to which different countries possess various factors of production such as labor, land and technology.<\/p>\n\n\n\n
The major theories of international trade that were advanced before the 20th century, which consist of (1) mercantilism, (2) absolute advantage, and (3) comparative advantage.<\/p>\n\n\n\n
Relative not absolute advantage in one economic activity that one nation enjoys in comparison with other nations.<\/p>\n\n\n\n
selling abroad<\/p>\n\n\n\n
A theory that suggests that the competitive advantage of certain industries in different nations depend on four aspects that form a “diamond”.<\/p>\n\n\n\n
A tax imposed on imports.<\/p>\n\n\n\n
Assumption that a resource used in producing a product for one industry can be shifted and put to use in another industry.<\/p>\n\n\n\n
A theory that suggests that under free trade, a nation gains by specializing in economic activities in which it has an absolute advantage.<\/p>\n\n\n\n
The aggregation of importing and exporting that leads to country-level trade surplus or deficit.<\/p>\n\n\n\n
Politically motivated trade sanctions against foreign countries to signal displeasure.<\/p>\n\n\n\n
A theory that suggests that nations will develop comparative advantages based on their locally abundant factors.<\/p>\n\n\n\n
Cost of pursuing one activity at the expense of another activity, given the alternatives (other opportunities).<\/p>\n\n\n\n
Buying from abroad<\/p>\n\n\n\n
Tariffs levied on imports that have been “dumped”<\/p>\n\n\n\n
Advantage that the first movers enjoy and do not share with late entrants.<\/p>\n\n\n\n
The economic advantage one nation enjoys that is absolutely superior to other nations.<\/p>\n\n\n\n
The major theories of international trade that were advanced in the 20th Century, which consists of (1) product life cycle, (2) strategic trade, and (3) national competitive advantage of industries.<\/p>\n\n\n\n
Government payment to domestic firms.<\/p>\n\n\n\n
Bureaucratic rules that make it harder to import foreign goods.<\/p>\n\n\n\n
An international agreement that shows that exporting countries voluntarily agree to restrict their exports.<\/p>\n\n\n\n
Government policy that provides companies a strategic advantage in international trade through subsidies and other supports.<\/p>\n\n\n\n
A requirement stipulating that a certain proportion of the value of the goods made in one country must originate from that country.<\/p>\n\n\n\n
An economic condition in which a nation exports more than it imports.<\/p>\n\n\n\n
Restriction on the quantity of imports<\/p>\n\n\n\n
The idea that governments should actively protect domestic industries<\/p>\n\n\n\n
Bureaucratic rules that make it harder to import foreign goods.<\/p>\n\n\n\n
Tariffs levied on imports that have been “dumped” (selling below costs to unfairly drive domestic firms out of business)<\/p>\n\n\n\n
Net losses that occur in an economy as a result of tariffs.<\/p>\n\n\n\n
The risk associated with unauthorized diffusion of firm specific know-how.<\/p>\n\n\n\n
The rights to appoint key managers and establish control mechanisms.<\/p>\n\n\n\n
The replacement of cross-border markets (such as exporting and importing) with one firm (MNE) locating and operating in two or more countries.<\/p>\n\n\n\n
Technology diffused from foreign firms to domestic firms.<\/p>\n\n\n\n
cost that a firm has to endure even when its investment turns out to be unsatisfactory.<\/p>\n\n\n\n
Industry dominated by a small number of players<\/p>\n\n\n\n
A political view that suggests that FDI unrestricted by government intervention is the best.<\/p>\n\n\n\n
A type of vertical FDI in which a firm engages in an upstream stage of the value chain in a host country.<\/p>\n\n\n\n
A firms quest for (O) ownership advantages, (L) location advantages, and internalization (I) advantages via FDI.<\/p>\n\n\n\n
A political view that only approves FDI when its benefit outweighs its costs.<\/p>\n\n\n\n
A type of FDI in which a firm duplicates its home country-based activities at the same value chain stage in a host country.<\/p>\n\n\n\n
Outbound FDI moving out of a country in a year.<\/p>\n\n\n\n
A political view that is hostile to FDI<\/p>\n\n\n\n
The imperfection of the market mechanisms that make transactions prohibitively costly and sometimes make transactions unable to take place.<\/p>\n\n\n\n
Advantages enjoyed by firms operating in a certain location.<\/p>\n\n\n\n
Total accumulation of inbound FDI in a country or outbound FDI from a country across a given period (usually several years)<\/p>\n\n\n\n
A type of vertical FDI in which a firm engages in a downstream stage of the value chain in a host country.<\/p>\n\n\n\n
An MNE’s possession of leveraging of certain valuable, rare, hard to imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI.<\/p>\n\n\n\n
Knowledge diffused from one firm to others among closely located firms.<\/p>\n\n\n\n
Inbound FDI moving into a country in a year.<\/p>\n\n\n\n
International transactions between two subsidiaries in two countries controlled by the same MNE.<\/p>\n\n\n\n
Ability to extract a favorable outcome from negotiations due to one party’s strength.<\/p>\n\n\n\n
The amount of FDI moving in a given period (usually a year) in a certain direction.<\/p>\n\n\n\n
Clustering of economic activities in certain locations.<\/p>\n\n\n\n
Investment in a portfolio of foreign securities such as stocks and bonds.<\/p>\n\n\n\n
The reaction of local firms to rise to the challenge demonstrated by MNEs through learning and imitation.<\/p>\n\n\n\n
Governments confiscation of foreign assets<\/p>\n\n\n\n
The deal struck by MNE’s and host governments, which change their requirements after the initial FDI industry.<\/p>\n\n\n\n
Strategy that focusses on developing new markets (“blue ocean”) and avoids attacking core markets defended by rivals, which is likely the result in a bloody price war or a “red ocean”.<\/p>\n\n\n\n
An attempt to monopolize a market by setting prices below cost and intending to raise prices to cover losses in the long run after eliminating rivals.<\/p>\n\n\n\n
Law that outlaws cartels (trusts).<\/p>\n\n\n\n
An output and price fixing entity involving multiple competitors.<\/p>\n\n\n\n
The process of anticipating rivals’ actions in order to both revise a firms plan and prepare to deal with rivals response.<\/p>\n\n\n\n
sufficient resources possessed by a price leader to deter and combat defection.<\/p>\n\n\n\n
The overlap between two rivals’ markets<\/p>\n\n\n\n
The extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those local firm.<\/p>\n\n\n\n
Government policy governing the rules of the game in competition.<\/p>\n\n\n\n
firms directly negotiate output pricing and divide markets.<\/p>\n\n\n\n
government policy designed to combat monopolies and cartels<\/p>\n\n\n\n
the percentage of total industry sales accounted for by the top four, eight, or twenty firms.<\/p>\n\n\n\n
multimarket firms respect their rivals’ spheres of influence in certain markets, and their rivals reciprocate, leading to tactic collusion.<\/p>\n\n\n\n
law that makes it illegal for an exporter to sell goods below cost abroad with the intent to raise prices after eliminating local rivals.<\/p>\n\n\n\n
actions and responses undertaken by competing firms.<\/p>\n\n\n\n
strategy that centers on cooperating through joint ventures with MNE’s and sell offs to MNE’s.<\/p>\n\n\n\n
strategy that centers on local assets in areas in which MNE’s are weak.<\/p>\n\n\n\n
firms engage the same rivals in multiple markets<\/p>\n\n\n\n
a firm that has a dominant market share and sets “acceptable” prices and margins in the industry.<\/p>\n\n\n\n
in game theory, a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.<\/p>\n\n\n\n
retaliatory attacks on a competitors other markets if this competitor attacks a firms original market.<\/p>\n\n\n\n
price setting by monopolists or collusion parties at a level higher than the competitive level<\/p>\n\n\n\n
a set of actions in response to attack<\/p>\n\n\n\n
strategy that centers on leveraging homegrown competencies abroad<\/p>\n\n\n\n
firms indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels<\/p>\n\n\n\n
collective attempts between competing firms to reduce competition.<\/p>\n\n\n\n
a theory that studies the interactions between parties that compete and\/or cooperate with each other.<\/p>\n\n\n\n
strategy that centers on a firm engaging in rapid learning and then expanding overseas.<\/p>\n\n\n\n
an initial set of actions to gain competitive advantage<\/p>\n\n\n\n
an exporter selling goods below cost<\/p>\n\n\n\n
law that makes it illegal for an exporter to sell goods below cost abroad with the internet to raise price after eliminating local rivals.<\/p>\n\n\n\n
the potential for loss associated with fluctuations in the foreign exchange market<\/p>\n\n\n\n
a pure market solution to determine exchange rates.<\/p>\n\n\n\n
the difference between the offer price and the bid price<\/p>\n\n\n\n
an increase in the value of currency<\/p>\n\n\n\n
a stabilizing policy of linking a developing country’s currency to a key currency.<\/p>\n\n\n\n
a system in which all currencies were pegged at a fixed rate to the US dollar.<\/p>\n\n\n\n
a system of flexible exchange rates with no official common denominator.<\/p>\n\n\n\n
a system in which the value of most major currencies was maintained by fixing their prices in terms of gold.<\/p>\n\n\n\n
the market where individuals, firms, governments, and banks buy and sell foreign currencies.<\/p>\n\n\n\n
the price to buy a currency<\/p>\n\n\n\n
the weight a member country carries within the IMF, which determines the amount of its financial contribution (technically known as its “subscription”), its capacity to borrow from the IMF, and its voting power.<\/p>\n\n\n\n
the classic single shot exchange of one currency for another<\/p>\n\n\n\n
the loss in the value of the currency<\/p>\n\n\n\n
using selective government intervention to determine exchange rates<\/p>\n\n\n\n
a government policy to set the exchange rate of a currency relative to other currencies.<\/p>\n\n\n\n
a condition under which the forward rate of one currency relative to another currency is higher than the spot rate.<\/p>\n\n\n\n
a currency of commodity to which the value of all currencies are pegged.<\/p>\n\n\n\n
a country’s international transaction statement, which includes merchandise trade, service trade, and capital movement.<\/p>\n\n\n\n
a condition under which the forward rate of one currency relative to another currency is lower than the spot rate.<\/p>\n\n\n\n
specified upper or lower bounds within which an exchange rate is allowed to fluctuate.<\/p>\n\n\n\n
the price to sell a currency<\/p>\n\n\n\n
a phenomenon in which a large number of individuals and companies exchange domestic currency for a foreign currency.<\/p>\n\n\n\n
a foreign exchange transaction between two firms in which one currency is converted into another at Time 1, with an agreement to revert it back to the original currency at a specified Time 2 in the future.<\/p>\n\n\n\n
a monetary authority that issues notes and coins convertible into a key foreign exchange rate.<\/p>\n\n\n\n
an international organization that was established to promote international monetary cooperation, exchange, stability and orderly exchange arrangements.<\/p>\n\n\n\n
spreading out activities in a number of countries in different currency zones to offset any currency losses in one region through gains in other regions.<\/p>\n\n\n\n
The price of one currency in terms of another<\/p>\n\n\n\n
the effect of investors moving in the same direction at the same time, like a herd<\/p>\n\n\n\n
a foreign exchange transaction in which participants buy and sell currencies now for future delivery.<\/p>\n\n\n\n
a government policy to let supply and demand conditions determine exchange rates.<\/p>\n\n\n\n
a pure market solution to determine exchange rates<\/p>\n\n\n\n
using selective government intervention to determine exchange rates<\/p>\n\n\n\n
a government policy to set the exchange rate of a currency relative to other currencies<\/p>\n\n\n\n
a government policy to let supply and demand conditions determine exchange rates<\/p>\n\n\n\n
specified upper or lower bounds within an exchange rate is allowed to fluctuate<\/p>\n\n\n\n
a non-equity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time between transferring operations to a domestic agency or firm.<\/p>\n\n\n\n
the amount of resources committed to entering a foreign market.<\/p>\n\n\n\n
efforts amoung a number of firms to jointly market their products and services.<\/p>\n\n\n\n
A firms quest for linkage advantages, Leverage advantages, and learning advantages. These advantages are typically associated with multinationals from Emerging economies.<\/p>\n\n\n\n
Outsourcing agreement in R&D between firms<\/p>\n\n\n\n
A subsidiary located in a foreign country that is entirely owned by the parent multinational<\/p>\n\n\n\n
a new coporate entitiy created and jointly owned by two or more parent companies<\/p>\n\n\n\n
a mode of entry (exports and contractual agreements) that tends to reflect relatively smaller commitments to overseas markets.<\/p>\n\n\n\n
the benefits a firm reaps from the features specific to place<\/p>\n\n\n\n
method used to enter a foreign market<\/p>\n\n\n\n
a project in which clients pay contractors to design and construct new facilities and train personnel<\/p>\n\n\n\n
the extent of similarity or dissimilarity between regulatory, normative, and cognitive institutions of two countries.<\/p>\n\n\n\n
the positive or negative perception of firms and products from a certain country<\/p>\n\n\n\n
a mode of entry (JV and WOS) that indicates relativity larger, harder-to-reverse commitments to overseas markets.<\/p>\n\n\n\n
building factories and offices from scratch (on a proverbial piece of “green field” formerly used for agricultural purposes).<\/p>\n\n\n\n
the difference between two cultures along identifiable dimensions such as individualism.<\/p>\n\n\n\n
the amount of resources committed to entering a foreign market.<\/p>\n\n\n\n
the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises.<\/p>\n\n\n\n
a graph of the relationship between the price of a good and the quantity demanded; typically slopes downward.<\/p>\n\n\n\n
the sum of all individual demands for a particular good or service.<\/p>\n\n\n\n
a good for which, other things being equal, an increase in income leads to an increase in demand.<\/p>\n\n\n\n
a good for which, other things being equal, an increase in income leads to a decrease in demand.<\/p>\n\n\n\n
two goods for which an increase in the price of one leads to an increase in the demand for the other.<\/p>\n\n\n\n
two goods for which an increase in the price of one leads to a decrease in the demand for the other.<\/p>\n\n\n\n
the claim that, other things being equal, the quantity supplied of a good rises when the prices of the good rises.<\/p>\n\n\n\n
a table that shows the relationship between the price of a good and the quantity supplied.<\/p>\n\n\n\n
a graph of the relationship between the price of a good and the quantity supplied.<\/p>\n\n\n\n
a situation in which the market price has reached the level at which quantity supplied equals quantity demanded.<\/p>\n\n\n\n
the price that balances quantity supplied and quantity demanded.<\/p>\n\n\n\n
the quantity supplied and the quantity demanded at the equilibrium price.<\/p>\n\n\n\n
a situation in which quantity supplied is greater than quantity demanded<\/p>\n\n\n\n
a situation in which quantity demanded is greater than quantity supplied.<\/p>\n\n\n\n
the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.<\/p>\n\n\n\n
a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.<\/p>\n\n\n\n
a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price.<\/p>\n\n\n\n
a measure of how much the quantity demanded of a good responds to a change in consumers income, computed as the percentage change in quantity demanded divided by the percentage change in income.<\/p>\n\n\n\n
a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in price of the second good.<\/p>\n\n\n\n
a measure of how much the quantity supplied of a good responds to change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price.<\/p>\n\n\n\n
the set of assets in an economy that people regularly use to buy goods and services from other people.<\/p>\n\n\n\n
an item that buyers give to sellers when they want to purchase goods and services.<\/p>\n\n\n\n
the yardstick people use to post prices and record debts.<\/p>\n\n\n\n
an item that people can use to transfer purchasing power from the present to the future<\/p>\n\n\n\n
the ease with which an asset can be converted into the economy’s medium of exchange.<\/p>\n\n\n\n
money that takes the form of a commodity with intrinsic value<\/p>\n\n\n\n
when an economy uses gold as money or uses paper money that is converted into gold for money.<\/p>\n\n\n\n
money without intrinsic value that is used as money because of government decree.<\/p>\n\n\n\n
the paper bills and coins in the hands of the public<\/p>\n\n\n\n
balances in bank accounts that depositors can access on demand by writing a check.<\/p>\n\n\n\n
the central bank of the United States<\/p>\n\n\n\n
an institution designed to oversee the banking system and regulate the quantity of money in the economy<\/p>\n\n\n\n
the setting of the money supply by policymakers in the central bank.<\/p>\n\n\n\n
deposits that banks have received but have not loaned out<\/p>\n\n\n\n
a banking system in which banks hold only a fraction of deposits as reserves.<\/p>\n\n\n\n
the use of borrowed money to supplement existing funds for purposes of investment.<\/p>\n\n\n\n
the ratio of assets to bank capital<\/p>\n\n\n\n
a government regulation specifying a minimum amount of bank capital<\/p>\n\n\n\n
the purchase and sale of U.S. government bonds by the Fed<\/p>\n\n\n\n
the interest rate on the loans that the Fed makes to banks.<\/p>\n\n\n\n
the rate at which banks lend other commercial banks money that they have on deposit at the Federal Reserve<\/p>\n\n\n\n
the study of how the allocation of resources affects economic well-being<\/p>\n\n\n\n
The consumers (WTP) willingness to pay minus what the consumer actually paid for the goods, or services.<\/p>\n\n\n\n
New, Evolutionary, and Pendulum<\/p>\n\n\n\n
A force sweeping through the world in recent times.<\/p>\n\n\n\n
A long-run historical evolution since the dawn of human history<\/p>\n\n\n\n
One that swings from one extreme to another from time to time<\/p>\n\n\n\n
Direct investment in, control, and management of value-added activities in other countries<\/p>\n\n\n\n
Radical View, Free Market View, Pragmatic Nationalism<\/p>\n\n\n\n
Capital Inflow, Technology Spillover, Advanced Management Know-How, Job creation<\/p>\n\n\n\n
Loss of Sovereignty, Adverse effects on competition,
Capital outflow.<\/p>\n\n\n\n
Resource similarity and market commonality can yield a powerful framework for competitor analysis.<\/p>\n\n\n\n
The extent to which a given competitor possesses strategic endowment comparable, in terms of both type and amount, to those of the focal firm.<\/p>\n\n\n\n
Firms with a high degree are likely to have similar competitive actions. (Starbuck’s instant coffee & McDonald’s iced coffee)<\/p>\n\n\n\n
Mercantilism, Absolute advantage, and Comparative advantage<\/p>\n\n\n\n
Dynamic<\/p>\n\n\n\n
Static<\/p>\n\n\n\n
The economic advantage one nation enjoys that is superior to other nations<\/p>\n\n\n\n
The advantage one economic activity nation enjoys in comparison with other nations (relative, not absolute)<\/p>\n\n\n\n
A theory that suggests that the wealth of the world is fixed and that a nation that exports more and imports less will be richer.<\/p>\n\n\n\n
New, Maturing, and Standardized<\/p>\n\n\n\n
Intervention by governments in certain industries can enhance their odds for international success.<\/p>\n\n\n\n
The price of a commodity, a country’s currency, is fundamentally determined by this. Strong demand leads to price hikes; oversupply results in price drops.<\/p>\n\n\n\n
Mercantilism (although both are of the idea that governments should actively protect domestic industries from imports and vigorously promote exports)<\/p>\n\n\n\n
Forward transactions, an act know as currency hedging.<\/p>\n\n\n\n
The exchange rate risk associated with the time delay between entering into a contract and settling it.<\/p>\n\n\n\n
A transaction, such as forward transactions, that protects traders and investors from exposure to the fluctuations of the spot rate.<\/p>\n\n\n\n
A way to protect traders and investors from being exposed to the fluctuations of the spot rate<\/p>\n\n\n\n
A means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions (currency diversification)<\/p>\n\n\n\n
Proprietary, technological leadership, pre-emption of scarce resources, establishment of entry barriers to late entrants, avoidance of clash with dominant firms at home, relationships with key stakeholders, (such as governments.)<\/p>\n\n\n\n
Opportunity to free ride on first-mover investments, Resolution of technological and market uncertainty, First mover’s difficulty to adapt to market changes.)<\/p>\n\n\n\n
Non-equity and equity<\/p>\n\n\n\n
Reflects relatively smaller commitments to overseas markets. Determines firms MNE status.<\/p>\n\n\n\n
indicative of relatively larger, harder-to-reverse commitments. Determines firms MNE status.<\/p>\n\n\n\n
Establish “rules of the game” that economic players play by. A standard to follow in order to survive and prosper. By signaling which conduct is legitimate and which is not, institutions constrain the range of acceptable actions.<\/p>\n\n\n\n
The coercive power of governments (laws, regs, rules)<\/p>\n\n\n\n
Values, beliefs, and actions of other relevant players (norms, cultures, ethics)<\/p>\n\n\n\n
The internalized, taken-for-granted values and beliefs that guide behavior. (beliefs between right\/wrong)<\/p>\n\n\n\n
One that include laws, regulations and rules<\/p>\n\n\n\n
One that includes norms, cultures and ethics<\/p>\n\n\n\n
(1) managers and firms rationally pursue their interests and make choices within institutional constraints (bounded rationality)
(2) in situations where formal constraints are unclear or fail, informal constraints play a larger role in reducing uncertainty and providing constancy to managers and firms (personal relationships and connections)<\/p>\n\n\n\n
The dynamic interaction between institutions and firms, and considers firm behaviors as the outcome of such an interaction.<\/p>\n\n\n\n
An individual’s right to freedom of expression and organization. For example, starting up a firm is an act of economic expression<\/p>\n\n\n\n
These countries often experience wars, riots, protests, chaos, and breakdowns, which result in higher political risk.<\/p>\n\n\n\n
Citizens elect representatives to govern the country on their behalf.<\/p>\n\n\n\n
One person or party exercises absolute political control over the population.<\/p>\n\n\n\n
Law that uses comprehensive statutes and codes as a primary means to form legal judgments.<\/p>\n\n\n\n
Law shaped by precedents and traditions from previous judicial decisions.<\/p>\n\n\n\n
A legal system based on religious teachings.<\/p>\n\n\n\n
Relative to civil law, common law has more flexibility because judges have to resolve specific disputes based on their interpretation of the law. Civil law has less flexibility because judges only have the power to apply the law.<\/p>\n\n\n\n
The legal rights to use an economic resource and to derive income and benefits from it. Can be used as collateral for starting a firm; not as common in developing countries, therefore hindering economic growth.<\/p>\n\n\n\n
Rights associated with the ownership. They primarily include rights associated with patents, copyrights, and trademarks.<\/p>\n\n\n\n
One that is characterized by the “invisible hand” of market forces-all factors of production should be privately owned.<\/p>\n\n\n\n
One that is defined by a government taking all factors of production to be government-owned or state-owned, and all supply, demand, and pricing are planned by the government.<\/p>\n\n\n\n
One has elements of both a market economy and a command economy. It boils down to the relative distribution of market forces versus command forces.<\/p>\n\n\n\n
A curve that shows consumption bundles that give the consumer the same level of satisfaction (i.e. combinations of pizza and Pepsi with which the consumer is equally satisfied.)<\/p>\n\n\n\n
(1) Higher indifference curves are preferred to lower ones. People usually prefer to consume more goods rather than less.
(2) Indifference curves are downward sloping. The slope of an indifference curve reflects the rate at which the consumer is willing to substitute one good for the other.
(3) Indifference curves do not cross.
(4) Indifference curves are bowed inward. The slope of an indifference curve is the marginal rate of substitution\u2014the rate at which the consumer is willing to trade off one good for the other.<\/p>\n\n\n\n
The rate at which the consumer is willing to trade off one good for the other (i.e. how much Pepsi the consumer requires to be compensated for a one-unit reduction in pizza consumption)<\/p>\n\n\n\n
The consumption bundles that the consumer can afford.<\/p>\n\n\n\n
Additional bundles could be consumed with an increase in income.<\/p>\n\n\n\n
Indifference curve and budget constraint.<\/p>\n\n\n\n
The point at which this indifference curve and the budget constraint touch (the best combination of pizza and Pepsi available to the consumer.) The marginal rate of substitution equals the relative price of the two goods.<\/p>\n\n\n\n
The increase in total cost that arises from an extra unit of production<\/p>\n\n\n\n
The portion of total cost resulting from an extra unit of production.<\/p>\n\n\n\n
Change in total cost divided by change in quantity<\/p>\n\n\n\n
$15<\/p>\n\n\n\n
Fixed and Variable.<\/p>\n\n\n\n
If the revenue that it would earn from producing is less than its variable costs of production. P<AVC (Price is less than Avg Variable Cost)<\/p>\n\n\n\n
Competitive markets<\/p>\n\n\n\n
One who must accept the price as the market determines<\/p>\n\n\n\n
Horizontal line.<\/p>\n\n\n\n
Horizontal line<\/p>\n\n\n\n
Downward-sloping<\/p>\n\n\n\n
The monopoly has to accept a lower price if it wants to sell more output.<\/p>\n\n\n\n
A firm chooses a quantity of output such that marginal revenue equals marginal cost. The firm chooses quantity so that price equals marginal cost. Thus, the firm’s marginal-cost curve is its supply curve.<\/p>\n\n\n\n
Maximize profit.<\/p>\n\n\n\n
The monopolist’s profit-maximizing quantity of output is determined by the intersection of the marginal-revenue curve and the marginal-cost curve.<\/p>\n\n\n\n
Monopoly and Oligopoly have one to few firms, with limited products (cable TV), entry is difficult, and advertising is a natural feature. Monopolistic competition\/perfect competition have many firms, mono comp has differentiated products (novels\/movies) and perfect comp has identical products, entry is easy, and spend very little on advertising.<\/p>\n\n\n\n
Self-interest makes it difficult for the oligopolists to maintain the cooperative outcome. Relentless logic of self-interest drives the participants toward the non-cooperative outcome, which is worse for both parties.<\/p>\n\n\n\n
Forming a cartel and acting like a monopolist, but self-interest drives them towards competition.<\/p>\n\n\n\n
FOMC – Federal Open Market Committee and the open market operation, the purchase and sale of U.S. government bonds.<\/p>\n\n\n\n
The purchase and sale of U.S. government bonds.<\/p>\n\n\n\n
After the purchase, these dollars are in the hands of the public. Thus, an open-market purchase of bonds by the Fed increases the money supply.<\/p>\n\n\n\n
After the sale, the dollars the Fed receives for the bonds are out of the hands of the public. Thus, an open-market sale of bonds by the Fed decreases the money supply.<\/p>\n\n\n\n
The interest rate banks pay when borrowing from the Federal Reserve.<\/p>\n\n\n\n
A lower discount rate encourages banks to borrow from the Fed, increasing the quantity of reserves and the money supply.<\/p>\n\n\n\n
Higher discount rate discourages banks from borrowing reserves from the Fed, reducing the quantity of reserves in the banking system, which in turn reduces the money supply.<\/p>\n\n\n\n
The fraction of total deposits that a bank holds as reserves.<\/p>\n\n\n\n
Decrease the reserve requirements; therefore lowering the reserve ratio.<\/p>\n\n\n\n
Increase the reserve requirements; therefore raising the reserve ratio.<\/p>\n\n\n\n
Interest rates lower and aggregate demand expands.<\/p>\n\n\n\n
Raises interest rates and an increase in aggregate demand.<\/p>\n\n\n\n
Raises interest rates and an increase in aggregate demand.<\/p>\n\n\n\n
Lower income=less to spend in total=lower demand.
Higher income=more to spend in total=raise demand.<\/p>\n\n\n\n
A good for which an increase in income leads to an increase in demand<\/p>\n\n\n\n
a good for which an increase in income leads to a decrease in demand (car vs bus ride)<\/p>\n\n\n\n
When a fall in the price of one good reduces the demand for another good, the two goods are called substitutes (yogurt for ice cream).
When a fall in the price of one good raises the demand for another good, the two goods are called complements (hot fudge and ice cream).<\/p>\n\n\n\n
As Luke drops his price, your demand will decrease. Your demand curve will shift to the left.<\/p>\n\n\n\n
Price of the good itself, income, price of related goods, tastes, expectations, and number of buyers.<\/p>\n\n\n\n
1 – greater than or less than<\/p>\n\n\n\n
A measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income.<\/p>\n\n\n\n
A measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price<\/p>\n\n\n\n
Quantity moves proportionately more than the price (Price increase results in drastically lower demand).<\/p>\n\n\n\n
Quantity moves proportionately less than the price (Price increase results in slightly lower demand)<\/p>\n\n\n\n
Percentage change in quantity equals the percentage change in price.<\/p>\n\n\n\n
(1) Necessities, such as food and clothing, tend to have small income elasticities.
(2) Luxuries, such as caviar and diamonds, tend to have large income elasticities.<\/p>\n\n\n\n
A measure of how much the quantity demanded of one good responds to a change in the price of another good. Computed as the percentage change in quantity demanded of the first good divided by the percentage change in price of the second good. Substitutes=positive cross-price elasticity; complements=negative cross-price elasticity.<\/p>\n\n\n\n
(1) Price elasticity of demand – % chg in Q D \/ % chg in P
(2) Income elasticity – % chg in Q D \/ % chg in income
(3) Cross-price elasticity – % chg in Q D Good 1\/% chg in Good #2 P<\/p>\n\n\n\n
Price increases and quantity is ambiguous. (Dependent upon how large of a shift in supply\/demand)<\/p>\n\n\n\n
Price increases and quantity is ambiguous. (Dependent upon how large of a shift in supply\/demand)<\/p>\n\n\n\n
Price is ambiguous, quantity decreases.<\/p>\n\n\n\n
Price decreases, quantity ambiguous.<\/p>\n\n\n\n
Tax on goods produced abroad and sold domestically(tax on imported goods). A method used to restrict international trade.<\/p>\n\n\n\n
The fall in total surplus that results from a market distortion, such as a tax (new equilibrium price that is settled for the transaction will be higher and therefore some burden of this will be passed on to the consumer)<\/p>\n\n\n\n
A tariff causes a deadweight loss because a tariff is a type of tax. Like most taxes, it distorts incentives and pushes the allocation of scarce resources away from the optimum. (Oversupply and under demand)<\/p>\n\n\n\n
Tariffs and Non-Tariff<\/p>\n\n\n\n
Increase the price.<\/p>\n\n\n\n
The tariff will reduce the amount of importans, increase the amount of exports. The primary benefit is that it raises revenue for the government.<\/p>\n\n\n\n
Quantity increases for exporting at world price.<\/p>\n\n\n\n
The demand would increase.<\/p>\n\n\n\n
It would increase.<\/p>\n\n\n\n
Domestic sellers are better off, and domestic buyers are worse off. In addition, the government raises revenue.<\/p>\n\n\n\n
The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it<\/p>\n\n\n\n
The buyer.<\/p>\n\n\n\n
The area below the demand curve and above the price measures the consumer surplus in a market.<\/p>\n\n\n\n
The amount a seller is paid for a good minus the seller’s cost of providing it<\/p>\n\n\n\n
The seller.<\/p>\n\n\n\n
The area below the price and above the supply curve measures the producer surplus in a market.<\/p>\n\n\n\n
The total value to buyers of the goods, as measured by their willingness to pay, minus the total cost to sellers of providing those goods.<\/p>\n\n\n\n
To measure the economic well being of a society, in terms of efficiency and equality. (i.e. maximizing total surplus received (efficiency) and distributing economic prosperity (equality) uniformly among the members of society<\/p>\n\n\n\n
The study of economy-wide phenomena, including inflation, unemployment, and economic growth.<\/p>\n\n\n\n
The study of how households and firms make decisions and how they interact in markets.<\/p>\n\n\n\n
An economy’s income is the same as its expenditure because every transaction has two parties: a buyer and a seller.<\/p>\n\n\n\n
The market value of all final goods and services produced within a country in a given period of time.<\/p>\n\n\n\n
(1) Consumption (2) Investment (3) Govt purchases (4) Net exports<\/p>\n\n\n\n
Because they are not made in exchange for a currently produced good or service. Transfer payments alter household income, but they do not reflect the economy’s production.<\/p>\n\n\n\n
The production of goods and services valued at constant prices, ie. $1<\/p>\n\n\n\n
The production of goods and services valued at current prices, i.e. $1 in 2013, $2 in 2014, etc\u2026<\/p>\n\n\n\n
Because (answer) GDP is not affected by changes in prices, changes in (answer) GDP reflect only changes in the amounts being produced.<\/p>\n\n\n\n
developing countries<\/p>\n\n\n\n
gross national product<\/p>\n\n\n\n
Brazil<\/p>\n\n\n\n
BRICS countries<\/p>\n\n\n\n
North America, Western Europe, and Japan<\/p>\n\n\n\n
less than $2,000<\/p>\n\n\n\n
Lowering prices and features of existing products to meet emerging market needs<\/p>\n\n\n\n
It only has 19 member countries.<\/p>\n\n\n\n
Understanding the laws and values of the firm’s host nation<\/p>\n\n\n\n
focuses on the internal strengths on the firm<\/p>\n\n\n\n
foreign firms in host nations due to their non-native status<\/p>\n\n\n\n
It is a western ideology focused on exploiting and dominating the world through MNEs<\/p>\n\n\n\n
semiglobalization<\/p>\n\n\n\n
localization<\/p>\n\n\n\n
shrinking<\/p>\n\n\n\n
developing countries<\/p>\n\n\n\n
purchasing power parity<\/p>\n\n\n\n
Brazil<\/p>\n\n\n\n
BRICS countries<\/p>\n\n\n\n
Japan<\/p>\n\n\n\n
less than $2,000<\/p>\n\n\n\n
reverse innovation<\/p>\n\n\n\n
It only has 19 member countries<\/p>\n\n\n\n
institution-based<\/p>\n\n\n\n
resource-based<\/p>\n\n\n\n
Globalization is a not a one-directional phenomenon.<\/p>\n\n\n\n
semiglobalization<\/p>\n\n\n\n
Standardization<\/p>\n\n\n\n
government involvement in international trade<\/p>\n\n\n\n
protectionism<\/p>\n\n\n\n
National competitive advantage<\/p>\n\n\n\n
Product life cycle<\/p>\n\n\n\n
Product life cycle theory<\/p>\n\n\n\n
product is standardized<\/p>\n\n\n\n
It is the assumption that a resource used in producing a product for one industry can be shifted and put to use in another industry.<\/p>\n\n\n\n
explains patterns of trade based on factor endowments<\/p>\n\n\n\n
import tariffs<\/p>\n\n\n\n
Subsidies<\/p>\n\n\n\n
It is an export quota levied by a country on the quantity of its exports.<\/p>\n\n\n\n
It is an export quota levied by a country on the quantity of its exports.<\/p>\n\n\n\n
Antidumping duties<\/p>\n\n\n\n
investment in a portfolio of foreign securities that do not entail the active management of foreign assets<\/p>\n\n\n\n
a firm moves upstream or downstream at different value chain stages in a host country<\/p>\n\n\n\n
FDI stock<\/p>\n\n\n\n
ownership advantages, location advantages, and internalization advantage<\/p>\n\n\n\n
Internalization<\/p>\n\n\n\n
provides the firm with direct ownership to its foreign assets<\/p>\n\n\n\n
Agglomeration<\/p>\n\n\n\n
oligopolistic<\/p>\n\n\n\n
The radical view<\/p>\n\n\n\n
Learning from operations<\/p>\n\n\n\n
Obsolescing bargain<\/p>\n\n\n\n
sunk costs<\/p>\n\n\n\n
foreign exchange rate<\/p>\n\n\n\n
If the country’s interest rate is relatively high compared to other countries<\/p>\n\n\n\n
Balance of payments<\/p>\n\n\n\n
Clean float<\/p>\n\n\n\n
fixed exchange rate policy<\/p>\n\n\n\n
bandwagon effect<\/p>\n\n\n\n
gold<\/p>\n\n\n\n
All currencies were pegged at a fixed rate to the dollar.<\/p>\n\n\n\n
quota<\/p>\n\n\n\n
Forward transactions<\/p>\n\n\n\n
Currency swap<\/p>\n\n\n\n
Strategic hedging<\/p>\n\n\n\n
fixed<\/p>\n\n\n\n
currency hedging eats into company profits<\/p>\n\n\n\n
the inherent disadvantage foreign firms experience in host countries<\/p>\n\n\n\n
Agglomeration<\/p>\n\n\n\n
Firms enter culturally distant countries in later stages when they may gain more confidence.<\/p>\n\n\n\n
Avoidance of clash with a dominant firm at home<\/p>\n\n\n\n
Scale of entry<\/p>\n\n\n\n
equity and non-equity modes of entry<\/p>\n\n\n\n
Turnkey projects<\/p>\n\n\n\n
Licensing<\/p>\n\n\n\n
Ability to tap into the best, cost-effective locations<\/p>\n\n\n\n
They export through domestically based export intermediaries.<\/p>\n\n\n\n
BOT agreement<\/p>\n\n\n\n
wholly owned subsidiaries<\/p>\n\n\n\n
the positive or negative perception of firms and products from a certain country<\/p>\n\n\n\n
competitor analysis<\/p>\n\n\n\n
Multimarket competition<\/p>\n\n\n\n
Existence of an industry price leader<\/p>\n\n\n\n
Market commonality<\/p>\n\n\n\n
Cross-market retaliation<\/p>\n\n\n\n
predatory pricing<\/p>\n\n\n\n
pro-incumbent<\/p>\n\n\n\n
High resource similarity, low market commonality<\/p>\n\n\n\n
Attack, counterattack<\/p>\n\n\n\n
Defender strategy<\/p>\n\n\n\n
Dodger strategy<\/p>\n\n\n\n
Dodger strategy<\/p>\n\n\n\n
buyers will make purchases from other sellers.<\/p>\n\n\n\n
decrease quantity demanded.<\/p>\n\n\n\n
Jayden buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal<\/p>\n\n\n\n
curve, and it usually slopes downward.<\/p>\n\n\n\n
a normal good.<\/p>\n\n\n\n
an inferior good.<\/p>\n\n\n\n
increases the demand for the other good<\/p>\n\n\n\n
a decrease in the demand for energy drinks.<\/p>\n\n\n\n
an increase in demand.<\/p>\n\n\n\n
rises, the quantity supplied of the good rises.<\/p>\n\n\n\n
an increase in the quantity supplied.<\/p>\n\n\n\n
supply curve to the right.<\/p>\n\n\n\n
The number of sellers of ceiling fans increases.<\/p>\n\n\n\n
decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.<\/p>\n\n\n\n
The quantity of irons supplied at each possible price of irons<\/p>\n\n\n\n
True<\/p>\n\n\n\n
The good is a luxury.<\/p>\n\n\n\n
the equilibrium quantity decreases, and the equilibrium price is unchanged.<\/p>\n\n\n\n
4<\/p>\n\n\n\n
increase total revenue of donut sellers.<\/p>\n\n\n\n
Diamonds<\/p>\n\n\n\n
be positive, and your roommate’s would be negative.<\/p>\n\n\n\n
complements<\/p>\n\n\n\n
The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve.<\/p>\n\n\n\n
9 percent in the short run and 21 percent in the long run.<\/p>\n\n\n\n
Market quantity supplied does not change when the price changes.<\/p>\n\n\n\n
decrease in both the aged cheddar cheese and bread markets<\/p>\n\n\n\n
buyers respond substantially to changes in the price of the good.<\/p>\n\n\n\n
tends to be elastic.<\/p>\n\n\n\n
elastic because there are many close substitutes for grape-flavored Hubba Bubba.<\/p>\n\n\n\n
2.33.<\/p>\n\n\n\n
may increase, decrease, or remain unchanged.<\/p>\n\n\n\n
value of everything she must give up to produce a good.<\/p>\n\n\n\n
the amount a seller is paid minus the cost of production<\/p>\n\n\n\n
The price of a substitute increases<\/p>\n\n\n\n
total surplus is maximized<\/p>\n\n\n\n
the value of tablets to consumers has increased, and the cost of producing tablets has decreased.<\/p>\n\n\n\n
maximizes the combined welfare of buyers and sellers .<\/p>\n\n\n\n
maximizes the combined welfare of buyers and sellers.<\/p>\n\n\n\n
$10<\/p>\n\n\n\n
both Janine and Henry experience an increase in consumer surplus.<\/p>\n\n\n\n
Consumer surplus decreases.<\/p>\n\n\n\n
More Danish-produced chips are sold in Denmark.<\/p>\n\n\n\n
producer surplus decreases and total surplus decreases in the market for that good.<\/p>\n\n\n\n
if it fails, the country faces a choice between two bad options.<\/p>\n\n\n\n
if Wheatland were to allow trade, it would import corn.<\/p>\n\n\n\n
will import almonds<\/p>\n\n\n\n
residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises.<\/p>\n\n\n\n
$500<\/p>\n\n\n\n
$4<\/p>\n\n\n\n
marginal cost is greater than average total cost<\/p>\n\n\n\n
how many workers to hire.<\/p>\n\n\n\n
specialization of labor.<\/p>\n\n\n\n
economies of scale because average total cost is falling as output rises<\/p>\n\n\n\n
long-run average total cost increases as output increases.<\/p>\n\n\n\n
\u2212$3,875<\/p>\n\n\n\n
$4,000<\/p>\n\n\n\n
$18,000<\/p>\n\n\n\n
the number of workers and the quantity of output.<\/p>\n\n\n\n
marginal revenue exceeds her marginal cost<\/p>\n\n\n\n
continue flying until the lease expires and then drop the run<\/p>\n\n\n\n\n
$2,325.00<\/p>\n\n\n\n\n
Yes, because the marginal revenue exceeds the marginal cost<\/p>\n\n\n\n
the portion of its marginal cost curve that lies above its average variable cost<\/p>\n\n\n\n
its fixed costs but not its variable costs<\/p>\n\n\n\n
total cost<\/p>\n\n\n\n
profits will rise<\/p>\n\n\n\n
Corn and satellite radio<\/p>\n\n\n\n
buyers will go elsewhere<\/p>\n\n\n\n
exactly triple<\/p>\n\n\n\n
barriers to entry<\/p>\n\n\n\n
there are economies of scale over the relevant range of output<\/p>\n\n\n\n
average total cost curve is downward sloping<\/p>\n\n\n\n
decreases, and marginal revenue decreases<\/p>\n\n\n\n
higher than if the firm charged just one price because the firm will capture more consumer surplus<\/p>\n\n\n\n
geographical location<\/p>\n\n\n\n
maximize profit and produce a socially optimal level of output<\/p>\n\n\n\n
. prevent mergers that would decrease competition and raise the costs of production<\/p>\n\n\n\n
earn economic losses<\/p>\n\n\n\n
It can earn an economic profit in the short run, but not the long run<\/p>\n\n\n\n
quantity demanded declines but not to zero<\/p>\n\n\n\n
the firm may be incurring economic losses<\/p>\n\n\n\n
positive or negative profit in the short run and a zero profit in the long run.<\/p>\n\n\n\n
all firms earn zero economic profits in the long run<\/p>\n\n\n\n
consumer surplus that is generated from the introduction of a new product<\/p>\n\n\n\n
be able to increase its markup over marginal cost<\/p>\n\n\n\n
the existence of an expensive advertisement is more important than the content of the advertisement<\/p>\n\n\n\n
the quantity of output approaches the socially efficient quantity<\/p>\n\n\n\n
a firm will have chosen its best strategy, given the strategies chosen by other firms in the market<\/p>\n\n\n\n
the total quantity of output produced by firms in the market gets closer to the socially efficient quantity.<\/p>\n\n\n\n
at a Nash equilibrium<\/p>\n\n\n\n
advertise on radio and earn $14,000<\/p>\n\n\n\n
U-Mobile and Trint will always sell Samorolas for exactly the same price<\/p>\n\n\n\n
$20<\/p>\n\n\n\n
prefer (4,4) to (6,2)<\/p>\n\n\n\n
Bundle J<\/p>\n\n\n\n
more popcorn and less Pepsi<\/p>\n\n\n\n
the substitution effect is larger than the income effect<\/p>\n\n\n\n
central to macroeconomic analysis as well as to microeconomic analysis<\/p>\n\n\n\n
income must equal expenditure<\/p>\n\n\n\n
divide their income among spending, taxes, and saving<\/p>\n\n\n\n
market prices<\/p>\n\n\n\n
and most goods and services produced illegally are excluded from GDP<\/p>\n\n\n\n
decreased<\/p>\n\n\n\n
GNP = GDP \u2212 Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad<\/p>\n\n\n\n
of a statistical discrepancy<\/p>\n\n\n\n
the income that households and businesses have remaining after satisfying their obligations to the government<\/p>\n\n\n\n
consumption of services<\/p>\n\n\n\n
not part of GDP because it is a transfer payment<\/p>\n\n\n\n
only changes in the amounts being produced<\/p>\n\n\n\n
only changes in prices<\/p>\n\n\n\n
$40 billion<\/p>\n\n\n\n
average person in the economy<\/p>\n\n\n\n
leave no doubt that a nation’s GDP is closely associated with its citizens’ standard of living<\/p>\n\n\n\n
greater specialization and to a higher standard of living<\/p>\n\n\n\n
store of value, unit of account, medium of exchange<\/p>\n\n\n\n
wealth held by people in their checking accounts<\/p>\n\n\n\n
$1,000 higher and M2 would be $1,500 higher<\/p>\n\n\n\n
buys government bonds, and in so doing increases the money supply<\/p>\n\n\n\n
$150<\/p>\n\n\n\n
It has $800 in reserves and $9,200 in loans<\/p>\n\n\n\n
must increase required reserves by $50<\/p>\n\n\n\n
$10,000 of money<\/p>\n\n\n\n
Currency and reserves<\/p>\n\n\n\n
It falls by $12 billion<\/p>\n\n\n\n
100% reserve banking<\/p>\n\n\n\n
offset shifts in aggregate demand and thereby stabilize the economy<\/p>\n\n\n\n
The interest-rate effect<\/p>\n\n\n\n
“Today the Fed told its bond traders to conduct open-market operations in such a way that the equilibrium federal funds rate would increase to 1.25 percent. “<\/p>\n\n\n\n
increase, so the money supply increases<\/p>\n\n\n\n
reduce interest rates, increasing investment and aggregate demand<\/p>\n\n\n\n
increase investment and real GDP, and decrease interest rates<\/p>\n\n\n\n\n
4.00<\/p>\n\n\n\n
the multiplier effect<\/p>\n\n\n\n
0.8 and the multiplier is 5<\/p>\n\n\n\n
increase, making the change in aggregate demand smaller<\/p>\n\n\n\n
increase the money supply<\/p>\n\n\n\n
policy affects aggregate demand with a lag, and the effects on aggregate demand are long-lived<\/p>\n","protected":false},"excerpt":{"rendered":"