Question

31. If two countries begin trade and both produce a product subject to internal economies of scale, then the country with the rate of production will production until it controls of the market. A) higher; increase; 50%. B) higher, increase; 100%. C) higher; decrease; 0% D) lower; increase; 50%. E) lower, increase; 100%. 32.__. The primary determinant of patterns of interregional trade is: A) accidents of history. B) centralized optimization. C) resource allocations. D) weather. E) factor abundance. 33. The study of factors that influence both international and interregional trade is referred to as: A) accidents of history. B) economic geography. C) factor abundance theory. D) weather analysis. E) centralized optimization. 34. If there are a large number of firms in a monopolistically competitive industry A) the country in which the firms are located can be expected to export the goods they produce. B) long-run profit will be equal to zero. C) there will be a small number of firms that are very large and the rest will be very small. D) the firms will converge production on a standardized product. E) there will be barriers to entry that prevent additional firms from entering the industry. 35. Firms that produce products must be competitive A) differentiated; imperfectly. B) differentiated; perfectly C) exported; imperfectly. D) standardized; imperfectly E) standardized; perfectly

Answer 1

31) (B) higher; increase; 100%

Whenever 2 countries begin trade and produce a product, the country which will have a higher rate of production will try and increase its production and ultimately control 100% of the market.

32) (A) accidents of history

In interregional trade, pattern is determined by the happenings of the past.