The Heckscher-Ohlin Theorem Looks to ________ to Explain Trade Flows

question 48

Multiple Choice

The Heckscher-Ohlin theorem looks to ________ to explain trade flows.

• A) relative factor endowments
• B) the existence of trade barriers
• C) acquired comparative advantage
• D) the differences in preferences among consumers

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Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price.

Manufacturing Overhead

Manufacturing overhead includes all manufacturing costs other than direct materials and direct labor, such as rent, utilities, and depreciation on manufacturing facilities.

Predetermined Overhead Rate

A rate calculated at the beginning of an accounting period to allocate overhead costs to products or services based on a relevant activity base.

Variable Manufacturing Overhead

Costs that vary with the level of production output and may include items such as utility expenses and raw materials.