Two Countries Engaged in Trade in Products with No Scale

question 6

Multiple Choice

Two countries engaged in trade in products with no scale economies, produced under conditions of perfect competition, are likely to be engaged in

• A) Heckscher-Ohlin trade.
• B) oligopolistic competition
• C) monopolistic competition.
• D) intra-industry trade.
• E) inter-industry trade.

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Definitions:

Variable Cost

Expenses that vary directly with the amount of products or services a company generates.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including expenses like rent, salaries, and insurance.

Profit

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.

Contribution Rate

The percentage of income that is saved or invested, often in the context of pension plans or retirement savings.