In the Heckscher-Ohlin model, an increase in the supply of labor at constant com

Question

In the Heckscher-Ohlin model, an increase in the supply of labor at constant commodity prices will:

a. increase the output of both goods
b. reduce the output of the labor-intensive good
c. increase the price of capital and reduce wages
d. none of the above

The HO Model predicts that more trade for a country implies...
a. a tendency towards factor price equalization with other countries.

b. abundant factors gain

c. scarce factors lose

d. it will export the goods intensive in its abundant factors.

e. all of the above

Explanation / Answer

a) increase the output o f both goods

2) e) all of the above

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