Ture and False

1.We see robust evidence in the data of extensive trade among the industrial countries. This fact could be rationalized only if different (industrial) trading partners have a comparative advantage over the goods they are exporting.

2.In the "new trade" models seen in class, firms have monopoly power because they are the only producers of a differentiated variety (brand) of the final good. This implies that their revenues are going to be higher than in a model with perfect competition, because they can now sell as many units of output as they want, at a higher price.