Which of the Following Is an Assertion of the Heckscher-Ohlin

question 30

Multiple Choice

Which of the following is an assertion of the Heckscher-Ohlin model?

• A) In the long run, labor is mobile and capital is not.
• B) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
• C) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
• D) Factor price equalization will occur only if there is costless mobility of all factors across borders.
• E) An increase in a country's labor supply will increase production of the labor-intensive good and decrease production of the capital-intensive good.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for a more accurate comparison of actual to budgeted performance.

Servicing Materials

Materials and supplies used in the maintenance and repair of machinery or equipment during the production process or in providing services.

Flexible Budget

A budget designed to adapt to variations in activity or volume levels.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or sales activity within a certain period.