The factor-proportions theory states that a country will have a comparative advantage in and produce the product whose production is relatively intensive in the:
A) tastes and preferences in which the country is relatively abundant.
B) technology in which the country is relatively abundant.
C) factor of production in which the country is relatively abundant.
D) advertising in which the country is relatively abundant.
E) All of the above

Question

Quizplus · Accepted Answer

The factor-proportions theory, also known as the Heckscher-Ohlin theory, posits that a country will have a comparative advantage in producing goods that are intensive in the factors of production (such as labor, land, or capital) in which it is relatively abundant. This theory suggests that countries will export goods that make intensive use of their abundant factors and import goods that make intensive use of their scarce factors.

The Factor-Proportions Theory States That a Country Will Have a Comparative