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 71 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?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

More than 34,000 trademarked medication names and more than 10,000 generic medication names are in use in the United States.

Did you know?

In 1844, Charles Goodyear obtained the first patent for a rubber condom.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

For a complete list of videos, visit our video library