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Economies of scale

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Suppose two countries A and D use many inputs. Country A exports tractors and imports televisions. Assuming there are no economies of scale, which of the following statements is true?

a) If the countries did not trade, then A would have a lower opportunity cost for tractors.

b) Even though there is trade, A has a lower opportunity cost for tractors.

c) A is sure to produce no televisions while D is sure to produce no tractors.

d) Neither country can consume at a point outside its production possibility frontier.

Reference no: EM131049108

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