Internal economies of scale means that
A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs.
B) firms will have lower profits after international trade begins, because costs will be higher than when they just focused on the domestic market.
C) consumers will have less choices once trade begins, because firms will be squeezed out of the market.
D) simply expanding the size of the market the firm serves reduces overall per unit costs, since the firm can spread costs over more output.
D
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If buyers expect the price of a good to fall in the near future, we would expect that to cause the current price and the quantity traded to decrease as a result
a. True b. False Indicate whether the statement is true or false
Exhibit 21-2 Production possibilities curves for U.S. and Mexico
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As shown in Exhibit 21-2, the United States has a comparative advantage over Mexico in:
A. wheat, but not in cloth. B. cloth, but not in wheat. C. both wheat and cloth. D. neither wheat nor cloth