The theory of factor endowment holds that the inequality of relative prices is a function of regional factor endowments.

Question

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The theory of factor endowment argues that regions or countries with an abundance of a certain factor, such as labor or natural resources, will have a comparative advantage in producing goods that require that factor. This results in differences in relative prices among regions and countries. Therefore, the inequality of relative prices is indeed a function of regional factor endowments according to this theory.

The Theory of Factor Endowment Holds That the Inequality of Relative