The Heckscher-Ohlin model assumes that a nation's two industries use labor and capital:
A) at different intensities depending on changing technology.
B) at different intensities, with one being more capital-intensive than the other.
C) at the same intensity in each industry; that is, the capital-labor ratio is the same in each industry.
D) in no definite pattern.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model assumes that a nation's two industries use labor and capital at different intensities, with one being more capital-intensive than the other. This is central to the theory's prediction that countries will trade goods based on their relative abundance of factors of production.

The Heckscher-Ohlin Model Assumes That a Nation's Two Industries Use