H-O explains the link between
A) factor endowments and life cycles.
B) factor endowments and comparative advantage.
C) comparative advantage and competitive advantage.
D) life cycles and natural resources.

Question

Quizplus · Accepted Answer

Factor endowments refer to the availability of a country's resources such as land, labor, and capital. The theory of comparative advantage states that a country should specialize in producing goods and services that it can produce at a lower opportunity cost than other countries. Factor endowments play a key role in determining a country's comparative advantage in the production of certain goods and services. For example, a country rich in fertile land and agricultural labor may have a comparative advantage in producing agricultural products.

H-O Explains the Link Between