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Explain Why Positive Economies of Scale in One (Of Two)

question 11

Essay

Explain why positive economies of scale in one (of two) sectors may establish a comparative advantage for the large (as compared to the small) country in the production of the commodity which exhibits positive scale economies.


Definitions:

Realized Holding Gains

Gains recognized from the sale of an investment or asset that were previously unrealized.

Rising Prices

An economic condition characterized by a general increase in consumer prices or the cost of living, often referred to as inflation.

Conservatism

An accounting principle that requires potential expenses and liabilities to be recognized immediately, while revenues are only recognized when they are assured.

Accounting Principle

A general rule or guideline that guides accounting practices, ensuring consistency, reliability, and transparency in financial reporting.

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