In the Heckscher-Ohlin model,when there is international-trade equilibrium
A) the relative price of the capital intensive good in the capital rich country will be the same as that in the capital poor country.
B) the capital rich country will charge less for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
C) the capital rich country will charge more for the capital intensive good than the price paid by the capital poor country for the capital-intensive good.
D) workers in the capital rich country will earn more than those in the poor country.
E) the workers in the capital rich country will earn less than those in the poor country.

Question

Quizplus · Accepted Answer

In the Heckscher-Ohlin model, international trade leads to factor price equalization, meaning that the relative prices of goods become equal across countries due to trade.

In the Heckscher-Ohlin Model,when There Is International-Trade Equilibrium