Economies of scope exist when:
A. C(Q1) ? C(Q2) > C(Q1, Q2).
B. C(Q1) ? C(Q2) < C(Q1, Q2).
C. C(Q1) + C(Q2) > C(Q1, Q2).
D. C(Q1) + C(Q2) < C(Q1, Q2).
Answer: C
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The Heckscher-Ohlin model basically states that countries will specialize and trade those goods in which they have comparative advantage
Indicate whether the statement is true or false
Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highly unrealistic. B) The existence of nontraded goods results in a high degree of specialization among countries. C) International trade has no impact on income distribution. D) The unimportance of economies of scale as a cause of trade. E) Companies tend to export goods in which they have a relatively high level of productivity.
Labor saving nonneutral technical progress allows a firm to
A) produce more output with the same inputs. B) use less labor and the same amount of other inputs to produce the same level of output. C) use more labor to produce the same level of output. D) use less labor and more of other inputs to produce the same level of output.
If a series of major technological breakthroughs occur in the economy at the same time, then the most likely outcome would be that the economy's
a. investment curve will shift downward b. investment curve will shift upward c. consumption curve will shift downward d. consumption curve will shift upward e. position along the existing investment curve will move upward