In the Heckscher-Ohlin Model with Two Goods and Two Factors

question 96

Multiple Choice

In the Heckscher-Ohlin model with two goods and two factors, an increase in either factor will be absorbed by the economy, changing the outputs of each good but leaving factor prices unaffected. What is the name of this result?

• A) factor price insensitivity
• B) factor price equalization
• C) factor price theorem
• D) factor price absorption

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