The Leontief paradox provided
A) support for the principle of comparative advantage.
B) support for the factor-endowment theory.
C) evidence against the factor-endowment theory.
D) evidence against the principle of comparative advantage.

Question

Quizplus · Accepted Answer

The Leontief paradox provided evidence against the factor-endowment theory, which suggests that a country with abundant capital should export capital-intensive goods and import labor-intensive goods. However, Leontief found that the US, despite being capital-abundant, was exporting more labor-intensive goods than capital-intensive goods. This contradicted the predictions of the factor-endowment theory and led to doubts about the validity of the theory.

The Leontief Paradox Provided