The HeckscherOhlin model simplifies the analysis by
Assuming:
A)there is unemployment of workers in the home country.
B)there are a variety of levels of workers and types of capital.
C)land is an important factor of production.
D)there are only two nations, with two goods and two factors of production.

Question

The Heckscher­Ohlin model simplifies the analysis by
Assuming:
A)there is unemployment of workers in the home country.
B)there are a variety of levels of workers and types of capital.
C)land is an important factor of production.
D)there are only two nations, with two goods and two factors of production.

Quizplus · Accepted Answer

The Heckscher­Ohlin model is a two-country, two-good, two-factor model that assumes perfect competition, full employment of labor and capital, and no transportation costs or trade barriers. Therefore, the correct answer is option D, which states that there are only two nations, with two goods and two factors of production. Option A is incorrect because the model assumes full employment of labor, and option B is incorrect because it assumes a variety of levels of workers and types of capital, which are not included in the model. Option C is also incorrect because the model focuses on labor and capital as the only factors of production, ignoring the role of land.

The Heckscher­Ohlin Model Simplifies the Analysis by

The HeckscherOhlin Model Simplifies the Analysis by