33. From earlier chapters you will recall that technological change shifts the average cost curves. Draw a

graph showing how technological change could influence intra-industry trade.

34. Consider two countries: South Korea and Taiwan. Taiwan can produce one million mobile phones per day

at the cost of $10 per phone and South Korea can produce 50 million mobile phones at $5 per phone.

Assume these phones are the same type and quality and there is only one price. What is the minimum

price at which both countries will engage in trade?
470 19 • Problems

35. If trade increases world GDP by 1% per year, what is the global impact of this increase over 10 years? How

does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint: To answer this

question, here are steps you may want to consider. Go to the World Development Indicators (online)

published by the World Bank. Find the current level of World GDP in constant international dollars. Also,
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