External Economies and International Trade

1. 1/External economies of scale will ________ average cost when output is ________ by ________.

• A) reduce; increased; the industry

• B) reduce; increased; a firm

• C) increase; increased; the industry

• D) reduce; reduce; the industry

2/What is the ambiguous effect on external economies?

• A. Trade based on external economies has an ambiguous effect on national welfare.

• B. There will be gains to the world economy by concentrating production of industries with external economies.

• C. Both A and B are correct

• D. Both A and B are incorrect

3/ What does External Economies of Scale Trade Based On?

• A. The breakdown of perfect competition, unless they take the form of external economies, which occur at the level of the industry instead of the firm

• B. The increase or decrease national welfare, and countries may benefit from temporary protectionism if their industries exhibit external economies of scale either at a point in time or over time

• C. Depending on the size

  of the company or the

  size of the industry

4/ What are external economies of scale in the context of international trade?

• A. Cost savings achieved by individual firms

• B. Cost savings that benefit an entire industry

• C. The cost of exporting goods

• Tariffs imposed on imported goods

5/ What is the primary goal of countries engaging in international trade

due to specialization driven by external economies?

• A. To achieve

  self-sufficiency

• B. To increase competition within their borders

• C. To maximize production costs

• D. To improve overall economic welfare

6/ In the context of dynamic increasing profits,

what is the primary focus of a company's strategy?

• A. Short-term profit maximization

• B. Reducing competition

• C. Long-term sustainability and innovation

• D. Regulatory compliance

7/ Which of the following is an example of a company benefiting

from dynamic increasing profits through innovation?

• A. A company that relies on outdated technology and practices

• B. A tech startup that constantly develops new software features

• C. A company that cuts costs by reducing product quality

• D. A retail store with consistently declining sales

8/ Which of the following is an example of a region known for

benefiting from external economies in the technology industry?

• A. Silicon Valley

• B. Wall Street

• C. Hollywood

• D. Broadway

9/ In the context of international trade with external economies,

what is the primary driver of specialization and trade patterns among countries?

• A. Currency

  exchange rates

• B. Government subsidies

• C. Comparative advantage

• D. Consumer preferences