In the 2-factor, 2-good Heckscher-Ohlin model, the country with a relative abundance of ________ will have a production possibility frontier that is biased toward production of the ________ good.
A) capital; capital intensive
B) labor; capital intensive
C) land; labor intensive
D) land; capital intensive
E) labor; land intensive

Question

Quizplus · Accepted Answer

In the Heckscher-Ohlin model, a country with a relative abundance of a particular factor (e.g., capital) will have a comparative advantage in producing goods that are intensive in the use of that factor (e.g., capital-intensive goods). Therefore, its production possibility frontier will be biased towards the production of goods that intensively use its abundant factor.

In the 2-Factor, 2-Good Heckscher-Ohlin Model, the Country with a Relative