The Key Assumptions for the H-O Theory to Work Are

question 18

Multiple Choice

The key assumptions for the H-O theory to work are: (1) perfect immobility of factors of production among countries; and (2) _____.

• A) perfect competition in the workplace
• B) superior allocation of production of goods and services
• C) very small labor force
• D) the existence of a trade surplus
• E) the acceleration of a trade deficit

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Definitions:

Functional Fixedness

The tendency to view an object in terms of its name or familiar usage.

Divergent Thinking

A mental approach or technique for producing inventive ideas through the examination of numerous potential answers.

Convergent Thinking

A cognitive process where an individual focuses on finding a single, correct solution to a problem, as opposed to generating multiple solutions.

Centration

A cognitive limitation in early childhood development, where the focus is on one salient aspect of a situation, neglecting other relevant features.