Suppose firms incur transportation costs to sell their product abroad. How do transportation costs affect the prices that firms charge abroad? Suppose the price offered at home and in the export market is identical, but there are transport costs to ship the good abroad. Does dumping occur? How does an increase in the number of product varieties benefit an importing country? Explain how increasing returns to scale in production can be a basis for trade. Why is trade within a country greater than trade between countries? Why would you expect sellers of branded goods with high upfront research and development costs to be more interested in free trade than producers who do not incur any fixed costs? Focus attention on the Ricardian model, the Heckscher-Ohlin model, and the monopolistic competition model if trade. Consider the intra-industry trade index for each model. What value for the index does each models predict? Explain your answer.
Suppose firms incur transportation costs to sell their product abroad. How do transportation costs affect the prices that firms charge abroad? Suppose the
export market is identical, but there are transport costs to ship the good abroad. Does dumping occur?
How does an increase in the number of product varieties benefit an importing country?
Explain how increasing returns to scale in production can be a basis for trade.
Why is trade within a country greater than trade between countries?
Why would you expect sellers of branded goods with high upfront research and development costs to be more interested in free trade than producers who do not incur any fixed
costs?
Focus attention on the Ricardian model, the Heckscher-Ohlin model, and the
for the index does each models predict? Explain your answer.
Transportation costs are the prices likely to be changed abroad and how to make up a larger share in the low quality products and ways to increase the transportation cost, with price in the low-quality goods that is proportional to the high-quality goods. Prices offered are identical and it is how to make the importer income, likely in to go to abroad and have the positive influence over the bilateral trade flows. Dumping occurs when there is a large production in the low costs and there is an over supply of production, that is being sold in the low prices at the international markets to lure them.
Higher transport costs would be a cause in the deter trade and likely be an act in distance to have a good transport costs within the ceramics sector.
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