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

question 5

Multiple Choice

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

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

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Definitions:

Individualistic Cultures

Societies that stress the importance of personal achievements and individual rights.

Pathogens

Microorganisms that cause disease in their host, including viruses, bacteria, fungi, and parasites.

Tradeoff

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Benefit

An advantage or profit gained from something.