Question
What are the differences between external and internal economies of scale with respect to (i) the size of firms, (ii) market structure, and (iii) gains from trade?

Subject
business-economics

Question
Comparing U.S. trade with Germany and Brazil, is trade with Germany more likely to be based on comparative advantage or economies of scale? Why?

Subject
business-economics

Question
What is intraindustry trade and how does it differ from interindustry trade? Are the gains from trade similar?

Subject
business-economics

Question
Many domestically owned apparel manufacturers buy their garments overseas, sew their labels into them, and then sell them abroad or back into the home market. What are some of the considerations that a clothing manufacturer might go through to choose this strategy

Question
General Motors is a U.S.-based multinational, but it is also one of the largest car manufacturers in Europe and South America. How might Dunning’s OLI theory explain the trade-offs GM faced as it decided whether to export to those two markets or

Question
Does intrafirm trade contradict the theory of comparative advantage? Why or why not?

Subject
business-economics

Question
Describe the changes in production requirements and the location of production that take place over the three phases of the product cycle.

Subject
business-economics

Question
Suppose that there are three factors: capital, labor, and land. Bread requires inputs of land and labor, and steel requires capital and labor.
a. Which factors are variable, and which are specific?
b. Suppose Canada’s endowments of land and capital

Question
Given the information in Questions 1 and 2, explain what happens to the returns to capital and labor in each country after trade begins.

Subject
business-economics

Question
Suppose that before trade takes place, the United States is at a point on its PPC where it produces 20 loaves of bread and 20 units of steel. Once trade becomes possible, the price of a unit of steel is 2 units