1- What are the two new welfare gains in Melitz model that were not present before?

Group of answer choices

A)Lower price and Higher Variety

B)Reallocation of resources across firms and firm innovation

C)Lower prices and Firm Heterogeneity

D)Innovation and resource reallocation across industries

E)Firm heterogeneity and Innovation

2- Factor Price Insensitivity is a result thatfollows from (there are many answer that sound correct but one is much more correct than the other ones):

Group of answer choices

A)Ricardo's Model.

B) Stoper -Samuelson Theorem.

C)Rybczynski Theorem.

D)Heckscher Ohlin Model.

E)Factor Price equalization model.

3- A stylized fact of bilateral trade relationships is that they are governed by gravity. The larger the distance between two countries the lower the trade between them. This effect has become stronger over time. What could explain this result

Group of answer choices

A) trade costs have increased.

B)increases of regional trade agreements.

C)there are other barriers to trade like language and shared border.

D) new trade relations between developed and developing countries (U.S and China).