In the 2-factor, 2-good Heckscher-Ohlin model, the country with a relative abundance of ________ will have a production possibility frontier that is biased toward production of the ________ good.
A) labor; labor intensive
B) labor; capital intensive
C) land; labor intensive
D) land; capital intensive
E) capital; land intensive

Question

Quizplus · Accepted Answer

In the Heckscher-Ohlin model, a country with a relative abundance of a particular factor (e.g., labor) will have a comparative advantage in producing goods that intensively use that factor (e.g., labor-intensive goods). This is because the country can produce these goods more efficiently and at a lower cost than goods that require factors in which the country is relatively scarce.

In the 2-Factor, 2-Good Heckscher-Ohlin Model, the Country with a Relative