Sentoria is an island nation in the Pacific Ocean. Its geographical lo

QUESTION

Sentoria is an island nation in the Pacific Ocean. Its geographical location is advantageous since it has access to a variety of aquatic life forms and also a number of freshwater sources that provide for fisheries.

The lack of arable land drives local demand for seafood. The competition in the domestic fishing industry is fierce and enables Sentoria to be one of the major exporters of seafood. Which of the following theories of international trade best explains Sentoria’s dominance as an exporter of seafood?
A. New trade theory

B. Product life-cycle theory

C. Mercantilism

D. Heckscher-Ohlin theory

E. Theory of national competitive advantage

ANSWER

E