Suppose That Two Countries, a and B, Employ the Same

question 16

Essay

Suppose that two countries, A and B, employ the same technology in the production of a good. External economies of scale apply in both countries. Analyze the effects of trade on long-run production levels if country A has a comparatively lower cost of production when trade begins.

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Definitions:

Undue Influence

The exercise of excessive pressure by one person in a relationship of trust to exploit the power imbalance and coerce another person to make decisions against their own will.

Dominant Position

A status in which a company or entity has a major share of the market, allowing it to influence market conditions or prices.

Undue Influence

An unethical process where one person takes advantage of their power or influence over another in order to benefit from their decisions or actions.

Special Relationship

A legal doctrine recognizing elevated duties between parties, such as those between guardians and wards or attorneys and clients, due to their relationship.