Final answer:
In the context of production for CPUs and chips, these items are considered direct materials, crucial inputs to the manufacturing process. The economies of scale are depicted in a downward sloping curve of average cost as production increases.
Step-by-step explanation:
When discussing CPUs, chips, and similar components in the context of production, they can be associated with direct materials, inputs and factors of production necessary in the manufacture of goods. These materials are essential in the creation of semiconductors and other computer technologies.
If the equilibrium quantity demanded for semiconductors is 90,000 and the average costs continue to decrease, this would suggest that the economy can take full advantage of economies of scale at this quantity. However, if the demand is lower, at 70,000, 50,000, or 30,000, the economy may not fully benefit from economies of scale, which depends on whether or not the average costs decrease below or increase above these levels of output.
With regards to international trade, even a small economy can enjoy the full benefits of economies of scale through access to larger global markets which enable the efficient production and sale of high quantities of goods. This allows for competitive pricing and diversity in the marketplace while maintaining efficient production levels.