According to the New Trade Theory

question 76

Multiple Choice

According to the new trade theory:

• A) the ability to capture first-mover advantages is restricted in a world that allows trade.
• B) differences in labor productivity between nations underlie the notion of comparative advantage.
• C) a country may predominate in the export of a good because it has firms that were among the first to produce that good.
• D) to ensure economic progress, countries should implement several trade barriers.
• E) different goods use resources in different proportions and this leads to constant returns to specialization.

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Definitions:

Nonrefundable Ticket

A type of ticket for which the cost is not returned to the purchaser if they decide to cancel their booking or are unable to use the ticket.

Soccer Match

A competitive game of soccer played between two teams, adhering to specific rules and durations as specified by the sport's governing body.

Average Fixed Costs

The fixed costs (expenses that do not change with the level of output) divided by the quantity of output produced. It decreases as output increases.

Output

The total amount of goods or services produced by a business, industry, or economy.