How are economies of scale, comparative advantage, and trade restrictions related?
1) If the government of a country imposes trade restrictions on the import of a certain good, the country will gain a comparative advantage in this good as well as economies of scale.
2) If a country has economies of scale in a good, its cost of production will increase, enabling the country to have an absolute advantage and become a world leader in trading this good.
3) If a country has economies of scale in the production of a certain good, the cost of production falls, causing the country to have a comparative advantage in that good.
4) If a country has a comparative advantage in producing a certain good, it gives rise to trade restrictions by the government, which leads to economies of scale.