Which of the Following Is an Assertion of the Heckscher-Ohlin

question 63

Multiple Choice

Which of the following is an assertion of the Heckscher-Ohlin model?

• A) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
• B) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.
• C) In the long run, labor is mobile and capital is not.
• D) Factor price equalization will occur only if there is costless mobility of all factors across borders.
• E) The wage-rental ratio is determined by relative product prices.

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Definitions:

Unilateral Actions

Actions or decisions made by one party or nation independently without consultation, agreement, or approval from others.

Concession

An act of compromising or yielding on a point, demand, or stance in the course of negotiations.

Perceived Differences

Differences that are noticed or believed to exist by an individual or group, whether or not they are real.

Comparison Groups

Reference groups used to evaluate or benchmark the outcomes, behaviors, or characteristics in a study or negotiation context.