This topic contains a solution. Click here to go to the answer

Author Question: Is it possible for an equilibrium that is consistent with purely competitive conditions to arise in ... (Read 62 times)

mwit1967

  • Hero Member
  • *****
  • Posts: 501
Is it possible for an equilibrium that is consistent with purely competitive conditions to arise in an industry with positive scale economies? If so, explain how this could happen. If not, why not?
 
  What will be an ideal response?

Question 2

Which of the following is NOT a proposition of the Heckscher-Ohlin model?
 
  A) A country has a comparative advantage in the production of that commodity which uses more intensively the country's more abundant resource.
  B) The effect of international trade is to tend to equalize factor prices between the trading nations.
  C) If Mexico is an unskilled labor abundant country, then Mexico has a comparative advantage in the production of goods that use unskilled labor more intensively.
  D) If the United States is a skilled labor abundant country, then the United States has a comparative advantage in the production of goods that use skilled labor more intensively.
  E) Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Animal_Goddess

  • Sr. Member
  • ****
  • Posts: 339
Answer to Question 1

Yes. If the scale economies were external to the firm, then there is no reason why the firms may not be in perfect competition.

Answer to Question 2

E





 

Did you know?

Hypertension is a silent killer because it is deadly and has no significant early symptoms. The danger from hypertension is the extra load on the heart, which can lead to hypertensive heart disease and kidney damage. This occurs without any major symptoms until the high blood pressure becomes extreme. Regular blood pressure checks are an important method of catching hypertension before it can kill you.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

For a complete list of videos, visit our video library