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

question 12

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 the labor-intensive good and decrease production of the capital-intensive good.
• B) An increase in a country's labor supply will increase production of both the capital-intensive and the labor-intensive good.
• 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) Factor endowments determine the technology that is available to a country, which determines the good in which the country will have a comparative advantage.

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Definitions:

Occupation Authorities

The body or bodies governing occupied territory, often referring to military or governmental entities that take control after a conflict or during martial law, responsible for administration and law enforcement.

Labor Relations

The field that studies the balancing of employer's interests with the rights of workers, and the laws and regulations affecting the employment relationship.

Labor Unions

Organizations formed by workers in various sectors to protect their rights, negotiate wages, benefits, and working conditions with employers.

Political Party

An organized group of people with similar political aims and opinions, that seeks to influence public policy by getting its candidates elected to public office.