The Leontief paradox
A) supported the factor-endowment theory.
B) concluded that exports were less capital intensive than import-competing goods.
C) found that national income differences underlie world trade patterns.
D) implied that diseconomies of scale occur at low output levels.

Question

Quizplus · Accepted Answer

The Leontief paradox concluded that exports were less capital intensive than import-competing goods, which contradicted the factor-endowment theory that predicted that countries with abundant capital would specialize in producing capital-intensive goods and exporting them. The paradox undermined the assumptions of the theory and demonstrated the complexity of trade patterns based on national income differences and other factors. It did not address diseconomies of scale.

The Leontief Paradox