The new trade theory is at variance with which 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) product life-cycle
C) comparative advantage
D) absolute advantage
E) national competitive advantage

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin theory suggests that a country will export products that use its abundant and cheap factors of production intensively, which contrasts with the new trade theory that emphasizes economies of scale and network effects.

The New Trade Theory Is at Variance with Which Theory