According to the Heckscher-Ohlin (HO)model the Source of Comparative Advantage

question 19

Multiple Choice

According to the Heckscher-Ohlin (HO) model the source of comparative advantage is a country's

• A)technology.
• B)advertising.
• C)factor endowments.
• D)Both A and C.

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Definitions:

External Costs

Costs that are not borne by the producer or consumer of a good or service, but by society as a whole, such as pollution.

Negative Externality

A cost that affects someone who did not choose to incur that cost or participate in the action causing it, often seen in pollution where the public pays the price for private industry actions.

MSC (Marginal Social Cost)

The complete expense incurred by society for the production of one more unit of a good or service, encompassing both individual costs and any external effects.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both private costs and externalities.