How do internal economies of scale give rise to international trade?

because it increases the market size.

What is a "forward-falling supply curve"?

The supply curve of perfectly competitive industry with external economies

External economies of scale

are more likely to be associated with a perfectly competitive industry.

External economies of scale occur when average costs

fall as the industry grows larger.

Where there are economies of scale, an increase in the size of the market will

lead to more firms producing and selling in that market and lower the price

Internal economies of scale

may be associated with an imperfectly competitive industry.

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Quiz3 Analysis of Inter Econ

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Answers

1
How do internal economies of scale give rise to international trade?
because it increases the market size.
because economies of scale transfer knowledge accross countries
They enhance resource differences between countries.
International trade occurs because of multi-national corporations.
2
When firms are heterogeneous, the international trade tends to make
better performing firms exit.
moderate-performing firm expands
moderate-performing firm exits
less-performing firms exit.
3
What is a "forward-falling supply curve"?
The supply curve of perfectly competitive industry with external economies
A supply curve describing reciprocal dumping.
The supply curve of a monopolistically competitive industry.
The supply curve of a monopolist engaged in dumping.
4
External economies of scale
tend to be large profits for each firm and an industry with few firms
lead to the creation of a single large monopoly.
are more likely to be associated with a perfectly competitive industry.
cannot be associated with a perfectly competitive industry.
5
External economies of scale occur when average costs
remain constant.
rise as the industry grows larger.
fall as the representative firm and industry grows larger.
fall as the industry grows larger.
6
What factor primarily explains how a particular region develops the external economies that support an industry?
Artful regional planning.
Accidents of history.
Shrewd political leadership.
The presence of internal economies.
7
Where there are economies of scale, an increase in the size of the market will
lead to more firms producing and selling in that market and raise the price
decrease the number of firms and leave the price unchanged.
lead to fewer firms producing and selling in the market and raise the price
lead to more firms producing and selling in that market and lower the price
8
International trade based on scale economies is likely to be associated with
the law of diminishing returns.
None of above
comparative advantages associated with Heckscher-Ohlin factor-proportions.
absolute advantages due to resource abundance.
9
Internal economies of scale
may be associated with a perfectly competitive industry.
may be associated with an imperfectly competitive industry.
can never form the basis for international trade.
are associated only with high-tech or complex products such as robotics.
10
Which of the following is not the reason for external economies of scale?
Specialized suppliers of intermediate goods.
Labor market pooling.
Knowledge spillovers.
Large fixed costs.

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