1.Explain what is meant by economies of scale and economies of
scope.
2. Give two examples of what would cause the short-run average
total cost to shift up. Give two examples of what would cause the
short-run average total cost to shift down. Draw both
scenarios.
Use the following for questions 3-4. Consider
two countries, Australia and Trinidad. Both are island economies
endowed with major fishing resources and moderate climates. For
simplicity, imagine that both countries have two industries:
tourism and fishing. For the history of the country Australia has
been open to free trade. Currently, Trinidad is closed to trade –
there are no tourist visitors and no exported (or imported)
fish.
3. The current market price and quantity of fish in Trinidad
would be...