The neoclassical theory of comparative advantage (the Heckscher-Ohlin model) differs from the classical theory (Ricardian model) in that

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The neoclassical theory of comparative advantage (the Heckscher-Ohlin model) differs from the classical theory (Ricardian model) in that it is based on a country's endowment of resources, rather than on absolute advantage in the production of goods. The Heckscher-Ohlin model argues that countries should specialize in production of goods that use their abundant factors of production, and trade with countries that have different factor endowments but are abundant in other factors. This means that trade is based on the relative abundance of resources, rather than on absolute advantage in production. The other answer choices (A, C, and D) do not accurately describe the Heckscher-Ohlin model.

The Neoclassical Theory of Comparative Advantage (The Heckscher-Ohlin Model) Differs