Question

which theory stresses that in some cases countries specialize in the production and export of certain products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms?

a. new trade
b. national competitive advantage
c balanced trade
d. heckscher - olin
e. product life - cycle

Explanation:

The new - trade theory posits that in certain industries with limited firm - support capacity in the world market, countries may specialize in production and export not due to factor - endowment differences. The national competitive advantage theory focuses on a nation's overall competitive edge. Balanced trade is about equal imports and exports. The Heckscher - Ohlin theory emphasizes factor endowments. The product life - cycle theory is about the stages of a product.

Answer:

A. New trade