The Heckscher-Ohlin Model assumes that:
A) factor endowments are the same in the two countries.
B) consumer tastes are different across countries.
C) the technologies used to produce the two goods are different in the two countries.
D) consumer tastes and technologies are the same in the two countries.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin Model assumes that countries have the same consumer tastes and production technologies, but differ in their factor endowments. This model explains international trade based on the differences in factor endowments across countries.

The Heckscher-Ohlin Model Assumes That