Q: Economic growth is just as likely to worsen a country’s terms of
Economic growth is just as likely to worsen a country’s terms of trade as it is to improve them. Why, then, do most economists regard immiserizing growth, where growth actually hurts the growing count...
See AnswerQ: From an economic point of view, India and China are somewhat
From an economic point of view, India and China are somewhat similar: Both are huge, low-wage countries, probably with similar patterns of comparative advantage, which until recently were relatively c...
See AnswerQ: For each of the following examples, explain whether it is a
For each of the following examples, explain whether it is a case of external or internal economies of scale: a. A number of firms doing contract research for the drug industry are concentrated in sout...
See AnswerQ: Over the past few decades, East Asian economies have increased their
Over the past few decades, East Asian economies have increased their share of world GDP. Similarly, intra–East Asian trade—that is, trade among East Asian nations—has grown as a share of world trade....
See AnswerQ: It is often argued that the existence of increasing returns is a
It is often argued that the existence of increasing returns is a source of conflict between countries, since each country is better off if it can increase its production in those industries characteri...
See AnswerQ: Give two examples of products that are traded on international markets for
Give two examples of products that are traded on international markets for which there are dynamic increasing returns. In each of your examples, show how innovation and learning-by-doing are important...
See AnswerQ: Evaluate the relative importance of economies of scale and comparative advantage in
Evaluate the relative importance of economies of scale and comparative advantage in causing the following: a. Most of the world’s aluminum is smelted in Norway or Canada. b. Half of the world’s large...
See AnswerQ: Consider a situation similar to that in Figure 7-3,
Consider a situation similar to that in Figure 7-3, in which two countries that can produce a good are subject to forward-falling supply curves. In this case, however, suppose the two countries have t...
See AnswerQ: It is fairly common for an industrial cluster to break up and
It is fairly common for an industrial cluster to break up and for production to move to locations with lower wages when the technology of the industry is no longer rapidly improving—when it is no long...
See AnswerQ: Recently, a growing labor shortage has been causing Chinese wages to
Recently, a growing labor shortage has been causing Chinese wages to rise. If this trend continues, what would you expect to see happen to external economy industries currently dominated by China? Con...
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