According to the new trade theory, firms that establish a first-mover advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.

a. true

b. false

This is a tricky one. The New Trade Theory does not mention "first movers advantage" directly. It says that a strong predictor of success is the ability to reach economies of scale and substantial networking.

What makes this tricky is that "first movers advantage" can lead to both of these things. If someone is first in the market, they have the possibility to build up capacity to reach economies of scale faster than anyone else.

This is a tricky question, but I would lean towards false because it's not ALWAYS the first mover that reaches economies of scale FIRST!

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.