The Heckscher-Ohlin model assumes that there are two countries, each of which produces two goods(say manufactures and agriculture) using labor and capital. Which of the following is an additionalassumption of the Heckscher-Ohlin model?A. The ratio of the quantity of labor to the quantity of capital is different for each nation, resulting indifferent “endowments” of capital and labor.B. One nation has larger quantities of both capital and labor than the other country.C. Capital is a specific resource in producing manufactured goods, and labor is a specific resource inproducing agricultural goods in each country.D. Labor and capital can move between countries

2. The Heckscher-Ohlin model differs from the Ricardian model of Comparative Advantage in that theformerA. has only two countries.B. has only two products.C. has two factors of production.D. has two production possibility frontiers (one for each country).E. None of the above.

1. The following are all assumptions that must be accepted in order to apply the Heckscher-Ohlin Theory, except for one:A. countries differ in their endowments of factors of production.B. countries differ in their technologies.C. there are two factors of production.D. one product always requires more machines per worker in its production than does the other product.

In the Heckscher-Ohlin model, an increase of capital stock by 30% and an increase of labour stock by 15% will Group of answer choices increase the output of labor-intensive good and will have an ambiguous effect on the output of capital-intensive good increase the output of labor-intensive good and will not affect the output of capital-intensive good have an ambiguous effect on the output of both goods increase the output of capital-intensive good and have an ambiguous effect on the output of labor-intensive good

The Heckscher-Ohlin Theory is based on assumptions:a.Perfect competition exists in both the product and factor markets.b.The factors of production are fully employed in both nations.c.The factors' intensities are not reversible.d.All of these

The Heckscher-Ohlin theorem predicts that when a capital-abundant country opens to trade Group of answer choices Capital owners and workers will be better off This country will import labor-intensive good The real wage in this country will increase Relative factor prices will not change