Existence of external economies of scale, International Economics

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(a) Consider there are two countries (country 1 and country 2) with two goods (X and Y). Further, under the assumptions of the Ricardian model, country 1 specialise in goods X. Derive the Ricardian world market for good X.

(b) Explain the main reasons for the existence of external economies of scale.

Write short notes on ALL of the subsequent:

(a) Voluntary Export Restrictions

(b) Anti-Dumping and Countervailing Duties

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