(a) Explain this following concept: (i) Intra-Industry Trade [2 marks] (ii) External economies of scale [2 marks] (iii) Internal economies of scale [2 marks] (iv) The overlapping-demand hypothesis [2 marks] (b) Assume that (l) the computer software industry exhibits external scale economies, (2} India has a comparative advantage over the United States over computer software, (3} the Indian market for software is one-tenth the size of the US market, and {4) the US has a head start in the industryr and currently produces for both the US and Indian markets. i. Illustrate in a diagram, what would happen if India protected its soware market? On what does your answer depend? [6 marks] ii.. If India did not protect its software market, would India capture the market? Explain. [6 marks]

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