The Heckscher-Ohlin model cannot explain Canada-Mexico trade since Canada has less labour and more land than Mexico.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model does not take into account only labour and land as factors of production. It also considers capital and technology. Therefore, Canada and Mexico could still have different endowments of these factors that lead to trade between the two countries, and the model could still be used to explain their trade patterns.

The Heckscher-Ohlin Model Cannot Explain Canada-Mexico Trade Since Canada Has