Two Countries Engaged in Trade in Products with No Scale

question 30

Multiple Choice

Two countries engaged in trade in products with no scale economies,produced under conditions of perfect competition,are likely to be engaged in

• A) inter-industry trade.
• B) monopolistic competition.
• C) intra-industry trade.
• D) Heckscher-Ohlin trade.
• E) oligopolistic competition

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Definitions:

Shortage

A shortage occurs when the demand for a product exceeds the supply of that product at a specific price.

Price Floor

A government-imposed minimum price charged for a commodity, aimed at preventing prices from falling too low.

Surplus

In economic terms, it refers to the amount by which production, assets, or resources exceed the portion used, often leading to excess supply in markets.

Shortage

A condition where the market's demand for a good or service outstrips its supply.