New trade theory stresses that in some cases countries specialize in t

QUESTION

New trade theory stresses that in some cases countries specialize in the production of particular products because of underlying differences in factor endowments.

Indicate whether the statement is true or false.

ANSWER

FALSE
New trade theory stresses that in some cases countries specialize in the production and export of particular 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.