According to the New Trade Theory, Which of the Following

question 110

Multiple Choice

According to the new trade theory, which of the following is most likely to be a result of market expansion due to trade?

• A)A wide variety of products is produced at greater unit costs than in the absence of trade.
• B)As the variety of products increases, demand for individual products decreases, leading to non-realization of economies of scale.
• C)Each nation may specialize in producing a narrower range of products, importing goods that it does not make.
• D)The ability to capture first-mover advantages is restricted in a world that allows trade.
• E)When countries do not differ in their resource endowments or technology, trade does not offer mutual benefits.

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Definitions:

Adrenal Gland

A pair of endocrine glands that sit above the kidneys and produce hormones such as adrenaline and cortisol, which help control stress and other bodily functions.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord.

Central Nervous System

The complex of nerve tissues that controls the activities of the body, comprising the brain and spinal cord.

Autonomic Nervous System

A component of the peripheral nervous system that regulates involuntary physiological processes including heart rate, digestion, respiratory rate, pupillary response, urination, and sexual arousal.