In the Heckscher-Ohlin Model, When There Is International-Trade Equilibrium

question 13

Multiple Choice

In the Heckscher-Ohlin model, when there is international-trade equilibrium

• A) the capital-rich country will charge more for the capital-intensive good than the price paid by the capital-poor country for the capital-intensive good.
• B) workers in the capital-rich country will earn more than those in the poor country.
• C) the workers in the capital-rich country will earn less than those in the poor country.
• D) the relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.
• E) the capital-rich country will charge less for the capital-intensive good than the price paid by the capital-poor country for the capital-intensive good.

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Definitions:

Capillaries

Tiny blood vessels that connect arteries and veins, facilitating the exchange of oxygen, nutrients, and waste between blood and tissues.

Filtration

A physical or mechanical process used to separate solid particles from fluids or gases by passing them through a filter medium.

ATP

Adenosine triphosphate, an energy-carrying molecule found in the cells of all living things, which captures chemical energy obtained from the breakdown of food molecules.

Diffusion

The process by which molecules move from an area of higher concentration to an area of lower concentration.