Eli Heckscher and Bertil Ohlin are associated with the theory of comparative advantage that stresses differences in
A) income levels among countries.
B) tastes and preferences among countries.
C) resource endowments among countries.
D) labor productivities among countries.

Question

Quizplus · Accepted Answer

Heckscher and Ohlin's theory of comparative advantage emphasizes that countries should specialize in producing goods for which they have a comparative advantage, which is determined by their resource endowments. This is known as the factor endowment theory, which states that countries will export goods that use their abundant factors of production and import goods that use their scarce factors of production. Therefore, resource endowments among countries are the main determinant of comparative advantage according to this theory.

Eli Heckscher and Bertil Ohlin Are Associated with the Theory