Economic Integration and Market Competition

What typically happens to consumer prices when a market becomes more integrated and competitive?

• Prices increase.

• Prices decrease.

• Prices do not change.

• Prices fluctuate unpredictably.

What is the primary feature of monopolistic competition?

• A single seller dominates the market.

• Many firms sell identical products.

• Many firms sell differentiated products.

• Sellers and buyers have perfect information.

Which of the following best describes intra-industry trade?

• Trading the same type of product between countries.

• Trading completely different products between countries.

• A country exporting only the goods it can produce most efficiently.

• A country importing goods it cannot produce at all.

Which of the following would be a result of economic integration?

• Lower consumer welfare.

• Increased trade barriers.

• Greater economies of scale.

• Reduced number of firms.

What is one possible outcome for less efficient firms in a more integrated and competitive market?

• They will always outperform more efficient firms.

• They may be forced to exit the market.

• They will become monopolies.

• They will always increase their market share.

Why might smaller countries benefit more from economic integration than larger countries?

• They have more resources.

• They experience a larger relative increase in market size.

• They have stronger currencies.

• They have larger economies to begin with.

Which of the following is an effect of increased market size due to integration?

• Decreased production.

• Increased number of firms.

• Decreased product variety.

• Increased costs.

Which sector is most likely to experience growth in intra-industry trade due to economic integration?

• The agriculture sector.

• The raw materials sector.

• The manufactured goods sector.

• The services sector.

What economic theory suggests that countries can benefit from economies of scale and network effects in international trade?

• Comparative advantage

• Mercantilism

• New Trade Theory

• Classical economics

Which term best describes the trades of similar but differentiated products between countries?

• Absolute trade

• Bilateral trade

• Intra-industry trade

• Inter-industry trade