According to the Heckscher-Ohlin theory, the pattern of international trade is determined by differences in
A) labor productivity.
B) diminishing returns.
C) factor endowments.
D) management practices.
E) trade barriers.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin theory posits that countries will export goods that utilize their abundant and cheap factors of production and import goods that require factors that are scarce and expensive domestically. Thus, the pattern of international trade is determined by differences in factor endowments.

According to the Heckscher-Ohlin Theory, the Pattern of International Trade