The HeckscherOhlin model assumes that there are two
Countries, each of which produces two goods (say
Manufactures and agriculture) using labor and capital.
Which of the following is an additional assumption of the
HeckscherOhlin model?
A)The ratio of the quantity of labor to the quantity of capital is different for each nation, resulting in different
"endowments" of capital and labor.
B)One nation has larger quantities of both capital and labor than the other country.
C)Capital is a specific resource in producing manufactured goods, and labor is a specific resource in producing
Agricultural goods in each country.
D)Labor and capital can move between countries.

Question

The Heckscher­Ohlin model assumes that there are two
Countries, each of which produces two goods (say
Manufactures and agriculture) using labor and capital.
Which of the following is an additional assumption of the
Heckscher­Ohlin model?
A)The ratio of the quantity of labor to the quantity of capital is different for each nation, resulting in different
"endowments" of capital and labor.
B)One nation has larger quantities of both capital and labor than the other country.
C)Capital is a specific resource in producing manufactured goods, and labor is a specific resource in producing
Agricultural goods in each country.
D)Labor and capital can move between countries.

Quizplus · Accepted Answer

The Answer is A

The Heckscher­Ohlin Model Assumes That There Are Two

The HeckscherOhlin Model Assumes That There Are Two