International trade based on external scale economies in both countries is likely to be carried out by
A) a relatively large number of price competing firms.
B) a relatively small number of price competing firms.
C) a relatively small number of imperfect competitors.
D) monopolists in each country.
E) a large number of oligopolists in each country.
A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
Mexico City is notorious for its excessive pollution. Mexico's measure of GDP is
A) increased by the estimated value of the pollution's harm. B) not affected by the estimated value of the pollution's harm. C) changed by the pollution only when comparing its GDP with the U.S. GDP. D) decreased by the estimated value of the pollution's harm. E) None of the above answers is correct.
Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that
a. the United States should produce more pork than what it requires and export some of it to Mexico. b. the United States should produce a moderate quantity of pork and import the remainder of what it requires from Mexico. c. the United States should refrain altogether from producing pork and import all of what it requires from Mexico. d. Mexico has nothing to gain from importing United States pork.
All solutions to market failures in markets for public goods or common resources:
A. try to force the internalization of externalities. B. are not perfect, and total surplus cannot be maximized in these markets. C. need to be accepted by the affected parties to be effective. D. must be provided by the government.