Two Countries Engaged in Trade in Products with Scale Economies

question 29

Multiple Choice

Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in

• A) immiserizing trade.
• B) inter-industry trade.
• C) intra-industry trade.
• D) Heckscher-Ohlinean trade.
• E) price competition.

---

Definitions:

Self-serving Bias

A cognitive bias where individuals attribute their successes to internal factors and failures to external factors.

In-group/out-group Bias

Describes the tendency to favor members of one's own group (the in-group) over those from different groups (the out-group), often leading to prejudice and discrimination.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.

Situational Causes

External environmental factors or conditions that influence an individual's behavior or outcomes, as opposed to intrinsic or internal factors.