Imagine scale economies were not only external to firms, but were ...

[londonang]

Imagine scale economies were not only external to firms, but were also external to individual countries.
 
  That is, the larger the worldwide industry (regardless of where firms or plants are located), the cheaper would be the per-unit cost of production. Describe what world trade would look like in this case.

Question 2

In his tests, Leontief used an input-output table to
 
  A) calculate the capital and labor required to produce 1 million of U.S. exports and imports.
  B) calculate the labor productivity of American workers relative to foreign workers.
  C) calculate the capital productivity of American capital relative to foreign capital.
  D) All of the above.

[annierak]

Answer to Question 1

Presumably each country would specialize in some component of the final product. This would result in in a high volume of intra-industry trade.

Answer to Question 2

A