What theories are categorized as firm-based theories? Which ...

[ericka1]

What theories are categorized as firm-based theories? Which theories are categorized as country-based trade theories? What does each type of theory help explain?
 
  What will be an ideal response?

Question 2

While negotiating a contract between an American firm and a Japanese supplier, the Japanese manager responds by saying yes. The Japanese manager probably meant ________.
 
  A) yes, I agree
  B) no, that's wrong
  C) yes, I understand
  D) I will think about it

[triiciiaa]

Answer to Question 1

Country similarity theory, product life cycle, and new trade theories are all firm-based theories. Mercantilism, absolute advantage, comparative advantage, and relative factor endowments are all country-based theories. Firms-based theories help explain trade in differentiated products. Country-based theories help explain trade in undifferentiated goods such as wheat, sugar, and steel.

Answer to Question 2

C