In the 2-Factor, 2-Good Heckscher-Ohlin Model, the Production Possibility Frontier

question 65

Multiple Choice

In the 2-factor, 2-good Heckscher-Ohlin model, the production possibility frontier is kinked when

• A) there is no factor substitution in production.
• B) the opportunity cost of production is constant.
• C) there are unemployed factor resources.
• D) a country does not engage in trade.
• E) transportation costs are very high.

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