In the Heckscher-Ohlin Model, Countries Are Assumed to Differ Only

question 51

Multiple Choice

In the Heckscher-Ohlin model, countries are assumed to differ only in terms of their

• A) factor endowments.
• B) tastes and preferences.
• C) available technologies.
• D) factor productivities.
• E) physical size.

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Definitions:

MRP

Marginal Revenue Product, which refers to the additional revenue generated from employing one more unit of a resource.

Perfectly Elastic

A situation in which the demand or supply for a good or service is infinitely responsive to changes in price.

Pure Rent

Pure Rent refers to the income earned from the use of land or other natural resources when supply is perfectly inelastic.

Fixed Supply

A situation where the quantity of a good available is constant and does not change in response to price changes.