The Assumption of Diminishing Returns in the Heckscher- Ohlin Model

question 10

Multiple Choice

The assumption of diminishing returns in the Heckscher- Ohlin model means that,unlike in the Ricardian model,it is likely that

• A)countries will not be fully specialized in one product.
• B)global production will decrease under trade.
• C)countries will benefit from free international trade.
• D)countries will consume outside their production possibility frontier.
• E)comparative advantage will not determine the direction of trade.

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Definitions:

Hyperactivity

Characterized by an excess of movement and/or quick actions that are not fitting to the setting or context, often associated with ADHD.

Apprehensive Expectations

Feelings of anxiety or fear about future events or outcomes, often anticipating negative or unfavorable results.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about a variety of topics, often interfering with daily activities.

Development

The pattern of continuity and change in human capabilities that occurs throughout life, involving both growth and decline.