The Leontief paradox:
A) Was applied to the product life cycle theory
B) Suggested that the U.S.exports labor-intensive goods
C) Found that national income differences underlie world trade patterns
D) Implied that diseconomies of scale occur at low output levels

Question

Quizplus · Accepted Answer

The Leontief paradox emerged from Wassily Leontief's empirical findings that showed the US, a capital-rich country, exported more labor-intensive goods, while importing more capital-intensive goods, which contradicted the predictions of the Heckscher-Ohlin model. Therefore, the correct choice is B.

The Leontief Paradox