Slide 1 Unit 1: Trade Theory External Economies of Scale 2/8/2012 Slide 2 constant returns to scale constant returns to scale – increases in output are proportional to…
* Ch. 6: Economies of Scale, Imperfect Competition, and International Trade * Constant Returns To Scale The models we have looked at previously all assumed constant returns…
Unit 1: Trade Theory External Economies of Scale 2/8/2012 constant returns to scale â increases in output are proportional to increases in inputs F(aK,aL) = aF(K,L) Definitions…
Technology and Production Technology determines how inputs can be transformed into outputs. Inputs can be generalized to two classes. Capital K Physical resources, materials,…