The factor-proportions theory of international trade states that:
A) a country should export the good with the highest output per unit of labor.
B) a country will export the good that requires more intensive use of its abundant factor.
C) a country should import the good that uses capital most intensively.
D) a country should export the factor that receives a higher wage in the other country.
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 export goods that require intensive use of its abundant factor of production. This theory contrasts with the idea that countries specialize based on labor productivity alone, focusing instead on the relative abundance of factors like labor and capital.

The Factor-Proportions Theory of International Trade States That