The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5

-According to the Heckscher-Ohlin theory, comparative advantage is based on:

Question

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
 
-According to the Heckscher-Ohlin theory, comparative advantage is based on:

Quizplus · Accepted Answer

According to the Heckscher-Ohlin theory, comparative advantage is based on the relative abundance of the factors of production. In this case, we can see that the prices of computers are different in the U.S. and Canada, indicating a difference in the relative abundance of factors such as labor and capital. Therefore, choice E is the best answer.

The Table Below Shows the Quantity Demanded (In Thousands) and Quantity