Assignment #4 - 1 ASSINGMENT#4 ECON 3110 1 An industry...

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1 ASSINGMENT #4 ECON 3110 ____ 1. An industry whose cost of producing additional units of output declines as output increases is saidto exhibit: a. decreasing returns to scale. b. efficiency gains. c. increasing returns to scale. d. monopolistic competition. ____ 2. Paul Krugman showed that in the case of increasing returns to scale and imperfect competition: ____ 3. Paul Krugman showed that in the case of increasing returns to scale, there are gains from trade that are derived from: ____ 4. Increasing returns to scale can help to explain: ____ 5. The increasing-returns-to-scale model of trade: a. shows that countries can export without having a comparative advantage. b. cannot tell us which increasing returns industry will become the export industry. c. shows that countries cannot gain from international trade. d. suggests countries should not interfere with international trade.
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