In the 2-Factor, 2-Good Heckscher-Ohlin Model, the Country with a Relative

question 17

Multiple Choice

In the 2-factor, 2-good Heckscher-Ohlin model, the country with a relative abundance of ________ will have a production possibility frontier that is biased toward production of the ________ good.

• A) labor; labor intensive
• B) labor; capital intensive
• C) land; labor intensive
• D) land; capital intensive
• E) capital; land intensive

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Definitions:

Single-Zone Pricing

A pricing strategy where a company charges the same price for a product or service across all geographic locations, ignoring transportation costs.

Freight-Absorption Pricing

Freight-Absorption Pricing is a strategy where a seller absorbs all or part of the freight charges to attract customers from distant locations.

Buyers

Individuals or entities that purchase goods or services for personal use, for resale, or for use in manufacturing or provision of services.

Basing-Point Pricing

Basing-point pricing is a pricing system where the price of goods includes delivery from a specific location, regardless of the actual shipping point to the buyer.