According to the HO model,
A)everyone automatically gains from trade.
B)the gainers from trade outnumber the losers from trade.
C)the scarce factor necessarily gains from trade.
D)None of the above.

Question

Quizplus · Accepted Answer

According to the HO model, everyone does not automatically gain from trade as some factors may lose out. However, the gainers from trade outnumber the losers from trade, resulting in a net positive gain. It is not necessary that the scarce factor gains from trade, as the gains may accrue to the abundant factor as well. Therefore, option B is the most appropriate answer.

According to the HO Model