If a firm increases its output in the ________ and unit costs ________, then the firm is experiencing ________ of scale.
A) long-run; decrease; economies
B) short-run; decrease; economies
C) long-run; decrease; diseconomies
D) short-run; decrease; diseconomies
E) long-run; increase; economies
Question 2
The HO model predicts that once trade begins factor prices will equalize between countries. This result occurs because of the assumption of
A) identical technology sets available to each country.
B) constant opportunity costs.
C) one factor of production.
D) free international mobility of factors.
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