The key assumptions for the H-O theory to work are: 1)perfect competition in the marketplace; and (2)_____.

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The H-O theory assumes perfect competition in the marketplace and perfect immobility of factors of production among countries. This means that factors of production (such as labor and capital) cannot move freely between countries and are fixed within their respective countries. This assumption is essential for the theory to work, as it allows for the specialization of countries based on their abundance of factors of production, leading to efficient production and trade.

The Key Assumptions for the H-O Theory to Work Are