If a firm that uses a production process that yields economies of ...

[P68T]

If a firm that uses a production process that yields economies of scale charges a price equal to ________, then profit will be ________.
 
  A) marginal cost; negative
  B) marginal revenue; maximized
  C) marginal cost; maximized
  D) marginal revenue; positive
  E) marginal cost; positive

Question 2

Which of the following is false?
 
  A) International differences in tastes, if sufficiently large, could overturn the comparative advantage predictions of the HO model.
  B) The classical and HO models make similar assumptions about international differences in technology.
  C) The HO model predicts that some groups will be hurt by international trade.
  D) Both the classical and the HO models predict that countries gain from international trade.

[gcook]

Answer to Question 1

A

Answer to Question 2

B