If two countries are very different in relative factor abundance,then empirical support for which of the following would be less likely?
A)the Gravity Theorem
B)the Law of One Price
C)the Law of Demand
D)the Factor Price Equalization Theorem
E)the Heckscher- Ohlin Theorem

Question

Quizplus · Accepted Answer

The Factor Price Equalization Theorem suggests that free trade will lead to the equalization of factor prices between countries. If two countries have very different relative factor abundances, this equalization is less likely to occur, as the differences in factor endowments would lead to persistent differences in factor prices.

If Two Countries Are Very Different in Relative Factor Abundance,then