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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Definitions:

Carbon Graphite

A form of carbon characterized by its crystalline structure, used in various applications like electrodes, lubricants, and as a reinforcing material.

Resin Bonding

A technique involving the adhesion of materials using a synthetic or natural resin to bind components together.

Open Circuit

A condition in an electrical circuit where there is a break in the circuit path, preventing current from flowing.

Short Circuit

An electric circuit that contains no resistance to limit the flow of current.