EC 340

Problem Set #3 - External Economies

Due by the end of class on February 2, 1998.

1. Until recently U.S. firms were not allowed to export many computer products to Eastern Europe and the Soviet Union. If free trade in computers is legalized, could this benefit U.S. buyers of computer products? If you think not, explain why that is impossible. If you think they could benefit, explain what conditions could make U.S. computer buyers better off.

2. Identify the sources of external economies and discuss the effect of external economies on international trade.

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David A. Latzko
318 COB
Department of Business and Economics
Wilkes University
Wilkes-Barre, PA 18766
phone: (717) 408-4718
fax: (717) 408-4917