According to the Heckscher - Ohlin model, if the United States is richly endowed in human capital relative to Mexico, then as NAFTA increasingly leads to more bilateral free trade between the two countries,

Related MCQs

• According to the factor endowment model of Heckscher and Ohlin, countries heavil y endowed with land will:
• If relatively capital-abundant country A opens trade with relatively labor- abundant country B an the trade takes place in accordance with the Heckscher-Ohlin Theorem. What would be the consequence for factor prices (w/r) in the two countries?
• The Heckscher-Ohlin model rules out the classical model’s basis for trade by assuming that________ is (are) identical between countries.
• One way in which the Heckscher-Ohlin model differs from the Ricardo model of comparative advantage is by assuming that __________ is (are) identical in all countries.
• As opposed to the Ricardian model of comparative advantage, the assumption of diminishing returns in the Heckscher-Ohlin model means that the probability is greater that with trade
• In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in
• Country A has 100 units of labor and Country B has 200 units of labor. Both countries produce computers and Web pages. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 Assume free trade exists and that the relative price is such that both countries specialize completely in the industry in which they have a comparative advantage (neither country produces both goods). The supply of computers relative to Web pages will be:
• The Heckscher-Ohlin model assumes that _____ are identical in all trading countries
• In international-trade equilibrium in the Heckscher-Ohlin model,
• The trade model of the Swedish economists Heckscher and Ohlin maintains that: