Home Page EC 340, International Trade and Finance Files EC 340 Problem Sets External Economies

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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.

David A. Latzko 318 COB Department of Business and Economics Wilkes University Wilkes-Barre, PA 18766 phone: (717) 408-4718 fax: (717) 408-4917 dlatzko@wilkes.edu wilkes1.wilkes.edu/~dlatzko