In the Presence of External Economies of Scale, Trade

question 37

Multiple Choice

In the presence of external economies of scale, trade

• A) will unambiguously improve welfare in both countries.
• B) will unambiguously worsen welfare in the exporting country and improve welfare in the importing country.
• C) may or may not improve welfare in both countries.
• D) will unambiguously improve welfare in the exporting country and worsen welfare in the importing country.
• E) will unambiguously worsen welfare in both countries.

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