These are multiple choice questions, so no need to explain,please choose only 1 answer for each question.

1.International trade based on comparative advantage can allow each country to consume*

a.Less of the goods it exports and imports.

b.More of the goods it exports, but always less of the goods it imports.

c.More of the goods it exports and imports.

d.More of the goods it imports, but always less of the goods it exports.

2.A tariff is*

a.A government imposed limit on the amount of a good that can be exported from a nation.

b.A tax on a good imported into a nation.

c.A government imposed barrier that sets a fixed limit on the amount of a good that can be imported into a nation.

d.An agreement between governments to limit exports from a nation.

3.Who benefits from a tariff on a good?*

a.Foreign governments.

b.Domestic producers of the good.

c.Foreign producers of the good.

d.Domestic consumers of the good.

4.When does the government gain the most revenue?*

a.The amount of revenue it gains is the same with a tariff and a voluntary export restraint.

b.When it imposes a quota.

c.When it negotiates a voluntary export restraint.

d.When it imposes a tariff.

5.Which of the following statements about the gains from international trade is correct?*

a.Everyone gains from international trade.

b.Everyone loses from international trade.

c.Some people gain from international trade and some lose, though overall the gains exceed the losses.

d.Some people gain and some people lose from international trade; overall the losses exceed the gains.

6.Product differentiation*

a.Means that monopolistically competitive firms can compete on quality and marketing.

b.Occurs when a firm makes a product that is slightly different from that of its competitors.

c.Makes the firm's demand curve downward sloping.

d.All of the above answers are correct.

7.In the long run,*

a.New firms will enter, and each existing firm's demand increases.

b.Existing firms will leave, and each remaining firm's demand increases.

c.Existing firms will leave, and each remaining firm's demand decreases.

d.New firms will enter, and each existing firm's demand decreases.

8.A monopolistically competitive firm has excess ca- pacity because in the*

a.Long run the firm earns an economic profit.

b.Short run the firm's average total cost does not equal the minimum average total cost.

c.Short run MR = MC.

d.Long run the firm's average total cost does not equal the minimum average total cost.

9.In the long run, a monopolistically competitive firm's economic profits are zero because of*

a.The downward-sloping demand curve of each firm.

b.Excess capacity.

c.The lack of barriers to entry.

d.Product differentiation.

10. Which of the following is NOT a characteristic of a perfectly competitive industry?*

a.A perfectly elastic demand for each firm.

b.A downward-sloping market demand curve.

c.Each firm decides its quantity of output.

d.Each firm produces a goods lightly different from that of its competitors.

11. For a perfectly competitive firm, MR always equals*

a.ATC

b.P

c.AVC

d.None of the above because MR is not always equal to the same thing