New Trade Theory Is at Variance with the ___________ Theory,which

question 22

Multiple Choice

New trade theory is at variance with the ___________ theory,which suggests that a country will predominate in the export of a product when it is particularly well endowed with those factors used intensively in its manufacture.

• A)Heckscher-Ohlin
• B)competitive advantage
• C)comparative advantage
• D)absolute advantage

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Definitions:

Constant Returns to Scale

A situation in production where increasing all inputs by a certain proportion results in output increasing by the same proportion.

Price-taker Industry

Industries where firms have no control over the market price and must accept the prevailing prices as given.

Short-run Market Supply

The total quantity of goods or services that producers are willing and able to sell at a given price in the market over a short period.

MC Curves

A graphical representation of how the marginal cost of producing one additional unit of a good varies with the quantity produced.