1. Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged in

A) inter-industry trade.

B) monopolistic competition.

C) intra-industry trade.

D) Heckscher-Ohlin trade.

E) oligopolistic competition

2-)

An industry is characterized by scale economies, and exists in two countries. Should these two countries engage in trade such that the combined market is supplied by one country's industry, then 

A) consumers in both countries would have more varieties and lower prices.

B) consumers in both countries would have higher prices and fewer varieties.

C) consumers in the importing country only would have higher prices and fewer varieties.

D) consumers in the exporting country only would have higher prices and fewer varieties.

E) consumers in both countries would have fewer varieties at lower prices.

3-)

In the model of monopolistic competition, if firms have________ average cost curves, then opening trade will cause_________ firms to_____ the industry.

A) different less efficient: exit

B) different; more efficient; enter

C) symmetric; less efficient; exit

D) symmetric; more efficient: enter

E) symmetric; less efficient: enter

Answer rating: 100% (QA)

1 Option A A Inter Industry trade Two countries engaged in trade in produc... View the full answer