Chapter 33: Q. 10. (page 803)
What factors does Paul Krugman identify that supported expanding international trade in the 1800s?
Short Answer
Paul Krugman mentions 1869 as the year after which trade expanded.
Chapter 33: Q. 10. (page 803)
What factors does Paul Krugman identify that supported expanding international trade in the 1800s?
Paul Krugman mentions 1869 as the year after which trade expanded.
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Get started for freeTable 19.15 shows how the average costs of production for semiconductors (the “chips” in computer memories) change as the quantity of semiconductors built at that factory increases.
a. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale?
b. If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors 50,000 semiconductors? 30,000 semiconductors?
c. Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.
Why might intra-industry trade seem surprising from the point of view of comparative advantage?
What is intra-industry trade?
In Exercise 33.31, is there an “ask” where Venezuelans may say “no thank you” to trading with Canada?
You just overheard your friend say the following: “Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade.” How would you respond?
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