Theory based on ___________________ states that international and interregional differences in production costs occur because of differences in the supply of production factors.

Question

Quizplus · Accepted Answer

A theory developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics suggests that differences in resource endowments will make developed countries more likely to trade with developing countries whose resource endowments are likely to be very dissimilar, than with other developed countries whose endowments are similar. According to this theory, countries would export products requiring large amounts of their abundant production factors and import products requiring large amounts of their scarce production factors.

Theory Based on ___________________ States That International and Interregional Differences