Initial empirical tests of the factor-proportions theory of international trade showed that U.S. exports tended to be labor intensive. This perverse empirical result is known as:
A) Krugman's puzzle.
B) Ricardo's problem.
C) Adam Smith's dilemma.
D) the Leontief Paradox.
E) None of the above

Question

Quizplus · Accepted Answer

The Leontief Paradox refers to the empirical finding by Wassily Leontief that, contrary to the factor-proportions theory, U.S. exports were more labor-intensive than its imports, despite the U.S. being relatively abundant in capital.

Initial Empirical Tests of the Factor-Proportions Theory of International Trade