The Heckscher-Ohlin theory explains comparative advantage as the result of differences in countries':
A) Economies of large-scale production
B) Relative abundance of various resources
C) Relative costs of labor
D) Research and development

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin theory argues that countries have a comparative advantage in producing goods that utilize resources that are relatively abundant in that country. This means that countries with different resource endowments will have comparative advantages in different goods, leading to trade.

The Heckscher-Ohlin Theory Explains Comparative Advantage as the Result of Differences