One of the Key Assumptions of the Heckscher-Ohlin Theory Is

question 19

Multiple Choice

One of the key assumptions of the Heckscher-Ohlin theory is that:

• A) technologies are the same across countries.
• B) the prices of resources in different countries are similar.
• C) resources can move freely from the production of one good to another within a country.
• D) trade has no effect on income distribution in a country.
• E) trade patterns are largely driven by international differences in productivity.

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Definitions:

Maximin Strategy

A decision rule used in situations of uncertainty to maximize the minimum gain or to minimize the maximum loss.

Equilibrium

A state in a market or economy where supply equals demand, resulting in stable prices and quantities.

Maximin Strategy

A decision-making rule used in situations with uncertainty to maximize the minimum gain that can be achieved.

Prisoners' Dilemma

A scenario in game theory where two individuals act in their own self-interest but would have been better off cooperating.