"The theory assumes that the price of the factors depends only on the factor endowment, that is the amount of a particular factor such as land or labor available in the country. This assumption is flawed because factor prices are not set in a perfect market. For example, prices also vary based on access to information about the factors. There could be labor available in a country, but not accessible at the time they are needed. This will lead to changes in the price of labor."Which trade theory is being referred to here?Group of answer choicesHeckscher-Ohlin theoryTheory of Absolute AdvantageNew Trade TheoryTheory of comparative advantage

Which trade theory advocates that a nation should export more than it imports to build wealth?A) Factor Endowment TheoryB) MercantilismC) Absolute Cost TheoryD) Opportunity Cost Theory

Which of the following statements regarding new trade theory is NOT true?Select one:a.The theory asserts that a country may dominate in the export of a good simply because it was lucky enough to have one or more firms among the first to produce that goodb.The theory highlights the value of economies of scale and first mover advantagesc.First movers can gain a scale-based cost advantage that later entrants find difficult to matchd.The theory argues that resource endowments and technological advantages are vital to succeed in international trade

The Heckscher-Ohlin theorem predicts that when a capital-abundant country opens to trade Group of answer choices Capital owners and workers will be better off This country will import labor-intensive good The real wage in this country will increase Relative factor prices will not change

n economic theory that trade generates wealth and that trade should be mostly focused on exports to protect the national economy.Group of answer choicesColonialismInvisible handMercantilismTariff

An economic theory:Group of answer choicesMust be expressed mathematically.Should be based on a model that is intended to provide a description of the situation of interest that is as comprehensive as possible.Consists of a model and hypotheses.Can be objectively determined to be the correct theory for the situation it is being used to study.