One of the suggestions of new trade theory is that
A) differences in technology leads to differences in productivity, which in turn, drives international trade patterns.
B) nations may benefit from trade irrespective of resource endowments or technology.
C) the demand for most new products tends to be based on nonprice factors.
D) globally dispersed production reduces the production costs of mature products.
E) comparative advantage does not arrive from a difference in factor endowments but from a difference in productivity.

Question

Quizplus · Accepted Answer

New trade theory suggests that nations can benefit from trade due to economies of scale and network effects, even if they do not have differences in resource endowments or technology.

One of the Suggestions of New Trade Theory Is That