Problem
1. Is it possible for growth in the scarce factor to lead to an expansion of trade in a large country? Why or why not?
2. Why might a developing country that experiences a bumper crop in its export good find itself less well-off than in a normal production year?
3. Explain why growth based only on a growing labor force can on average leave people less well-off. Would your answer be different if there were increasing returns to scale?