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WorksheetsEconomies of Scale and International Trade
Total questions: 10
Worksheet time: 8mins
Trade based on economies of scale reveals that the movement from autarky point to the higher indifference curve because of ____
Economies of scale
Constant return to scale
Economies of scope
Incomplete specialization
Identify why trade based on economies of scale assume single production possibility frontier?
Because of commodity X and Y are homogeneous
Because of two nations are identical in every respect
Technological gap exist
None of above
Why trade based on economies of scale assume convex production possibility frontier?
increasing return to scale
decreasing return to scale
constant return to scale
None of above
Identify statement that reflect the trade based on economies of scale
complete specialization
incomplete specialization
economies of scale
constant return to scale
constant production possibility frontier
What factor(s) determine economies of scale?
increase in labour efficiency
a firm can buy raw materials at a cheaper rate
technological improvements
average cost increase as firm's become bigger
Internal economies of scale are those that
Result from changes in production techniques
Increase due to the growth of the industry as a whole
Generate lower per unit production costs
Reduce production costs in the short run
Nation 1 is K-abundance and Nation 2 is L-abundance
True
False
Commodity X i L-intensive and commodity Y is K-intensive
True
False
A line that higher community indifference curve that tangent with is known as ____
production possibility frontier
trade possibility line
incomplete specialization
None of above
An economist argue that two nations need not be identical in every respect for mutually beneficial trade to result from increasing return to scale.
True
False
