In the HeckscherOhlin model with two goods and two
Factors, an increase in one factor will cause:
A)an increase in the production of the good that uses the factor intensively.
B)a decrease in the production of the good that use the factor intensively.
C)an increase in the production of the good that does not use the factor intensively.
D)no change in the production of both goods.

Question

In the Heckscher­Ohlin model with two goods and two
Factors, an increase in one factor will cause:
A)an increase in the production of the good that uses the factor intensively.
B)a decrease in the production of the good that use the factor intensively.
C)an increase in the production of the good that does not use the factor intensively.
D)no change in the production of both goods.

Quizplus · Accepted Answer

According to the Heckscher­Ohlin model, an increase in one factor will result in an increase in the production of the good that uses the factor intensively. This is because the increase in the factor will lead to a decrease in its relative price, making it cheaper to produce the good that uses that factor intensively.

In the Heckscher­Ohlin Model with Two Goods and Two

In the HeckscherOhlin Model with Two Goods and Two