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Why Is "Intra-Industry" Trade Difficult for the Heckscher-Ohlin Trade Theory

Question 14

Multiple Choice

Why is "intra-industry" trade difficult for the Heckscher-Ohlin trade theory to explain?


A) Most of it is conducted between developing countries,which the theory predicts little of.
B) Since the products are within the same industry and made with the same factors,differences in factor endowment cannot explain it.
C) Countries with abundant labor are not expected to also import labor-intensive products.
D) Industries are expected to compete with each and not trade with each when factors are immobile.

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