Product Differentiation and Internal Economies of Scale Yield Gains from Trade

question 44

Multiple Choice

Product differentiation and internal economies of scale yield gains from trade in the form of

• A) higher profits and lower trade costs.
• B) lower production costs and a greater variety of goods.
• C) the proximity-concentration effect.
• D) the substitution of immigration for foreign direct investment.
• E) a proliferation of competitive firms.

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Definitions:

Product-oriented Layout

A Product-oriented Layout organizes a production facility around the sequence of operations performed on a particular product line, optimizing efficiency for that product's manufacturing process.

Work Cells

Small, self-contained production units within a factory, designed to manufacture a specific product or component efficiently.

Direct Labour Cost

The cost associated with the work done by those directly involved in the manufacturing of products or the provision of services.

Employee Participation

The involvement of employees in decision-making processes and activities within an organization to improve engagement and performance.