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(A) in a 2x2x2 Context, State the Heckscher-Ohlin Theorem

question 25

Essay

(a) In a 2x2x2 context, state the Heckscher-Ohlin theorem. Then indicate how this theorem can be obtained, utilizing the physical definition of relative factor abundance.
(b) When a country enters into trade in accordance with the Heckscher-Ohlin theorem, what happens to the real income of the country's relatively abundant factor of production and what happens to the real income of the country's relatively scarce factor of production? Carefully explain.


Definitions:

Grandiose Delusion

A false belief of one's own superiority, greatness, or omnipotence that is not grounded in reality.

Delusions

Fixed false beliefs that are resistant to reason or confrontation with actual fact, often found in psychological disorders such as schizophrenia.

Delusion of Thought Insertion

A false belief where a person thinks that thoughts not their own are being inserted into their mind by an external source.

Persecutory Delusion

A false belief that one is being persecuted, conspired against, or harassed by others.

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