A Product Is Produced in a Monopolistically Competitive Industry with Scale

question 15

Multiple Choice

A product is produced in a monopolistically competitive industry with scale economies.If this industry exists in two countries,and these two countries engage in trade with each other,then we would expect

• A) each country will export different varieties of the product to the other.
• B) the country in which the price of the product is lower will export the product.
• C) the country with a relative abundance of the factor of production in which production of the product is intensive will export this product.
• D) neither country will export this product since there is no comparative advantage.
• E) the countries will trade only with other nations they are not in competition with.

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Definitions:

Beneficiary

A third party receiving benefits from a contract made between two other parties. Also, the person named in an insurance policy to receive benefits paid by the insurer in event of a claim.

Fire Insurance Policy

A contract that provides coverage against losses or damages caused by fire to property.

Premium

The consideration paid by the insured to the insurer for insurance protection.

Water Damage

Water damage refers to the destruction or harm caused to property by water intrusion, which can result from various sources like floods, leaks, or condensation.