Which of the Following Is an Assertion of the Heckscher-

question 32

Multiple Choice

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

• A)An increase in a country's labor supply will increase production of the labor- intensive good and decrease production of the capital- intensive good.
• B)In the long run,labor is mobile and capital is not.
• C)Factor endowments determine the technology that is available to a country,which determines the good in which the country will have a comparative advantage.
• 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 both the capital- intensive and the labor- intensive good.

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Definitions:

Cost Of Goods

The total cost incurred to acquire or manufacture the products sold during a specific period.

Conversion Costs

The sum of direct labor costs and manufacturing overhead costs, incurred to convert raw materials into finished products.

Direct Materials

Raw materials that are directly traceable to the manufacturing or production of a specific product.

Direct Labor

Direct Labor is the labor cost directly associated with the production of goods or services, which can be easily traced to individual units of products.