When external scale economies exist in an industry, new trade opportunities will cause consumers
A. in the exporting country to gain but consumers in the importing country to lose.
B. in both the exporting and importing countries to gain.
C. in both the importing and exporting countries to lose.
D. in the importing country to gain but the consumers in the exporting country to lose.
Answer: B
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A fiscal stimulus works to close a recessionary gap by shifting the
A) AD curve leftward. B) AS curve leftward. C) AD curve leftward and AS curve leftward. D) AD curve rightward. E) potential GDP line leftward.
Refer to the diagrams. The solid lines are production possibilities curves; the dashed lines are trading possibilities curves. The data suggest that:
A. West Lothian should specialize in, and export, beer.
B. both countries will be better off if they do not engage in specialization and trade involving
these two products.
C. West Lothian should specialize in, and export, pizza.
D. East Lothian should specialize in, and export, beer.