If Two Countries Begin Trade and Both Produce a Product

question 32

Multiple Choice

If two countries begin trade and both produce a product subject to external economies of scale, then the country with the ________ rate of production will ________ production until it controls ________ of the market.

• A) higher; increase; 100%
• B) higher; increase; 50%
• C) lower; increase; 100%
• D) lower; increase; 50%
• E) higher; decrease; 0%

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