1. trade costs explains w

1. trade costs explains w

1. trade costs explains why only a subset of firms export, and they also explain why this subset of firms will consist ofa. relatively larger and more productive firmsb. relatively larger and more unproductive firmsc. those firms with hogher marginal costd. relatively smaller and more productive firms2. Most firms inthe apparel and footwear indistries choose to outsource production to countries whrere labor is abundant (primary, Southeast Asia and the Carib bean)-but those forms do not intergrate with their suppliers there. On the other hand, firms in many capital -intensice industries choose to intergrate with their suppliers.What would choices imply for the extent of intra-firm trade across industries? That is, in what industries would a greater proportion of trade occur within firms?Intra-firm trade will bea. Lower in capiutal-intensice industriesb. higher in industries where there is a large level of pmoirts but virtually no exportsc. higher in industries with a higher degree of vertical FDId. higher in industries tht rely prolarily on outsourcing3. For the following, specify whether th eforeign direct investment is horizontal or vertical; in addition, describe whether that investment represents an FDI infglow or outflow from the countries that are mentioned.Nestle (a swiss muntinational producer of food and drinks) builds a new production factory in Bulgaria to produce KIT Kat chocolat barsChose right answer below.This would be a (horizontal, vertical) FDI outflow from (Swiss, Bulgaria) and inflow into (Swiss, Bulgaria)

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