extreme specialization and learning in certain kinds of cars with certain traits, like gas-efficient cars,

luxury cars, sport-utility vehicles, higher- and lower-quality cars, and so on. Moreover, nations can take

advantage of economies of scale, so that large companies will compete against each other across

international borders, providing the benefits of competition and variety to customers. This same argument

applies to trade between U.S. states, where people often buy products made by people of other states, even

though a similar product is made within the boundaries of their own state. All states—and all

countries—can benefit from this kind of competition and trade.

6. a. Start by plotting the points on a sketch diagram and then drawing a line through them. The following

figure illustrates the average costs of production of semiconductors.

The curve illustrates economies of scale by showing that as the scale increases—that is, as production
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