Q.

Which among the following is NOT an assumption of H-O Theorem

A. there are two countries involved. each country has two factors (labour andcapital) and produce two commodities either labour intensively or capital intensively.
B. there is no perfect competition in both commodity and factor markets. all production functions are hertogenious. production function is subject to increasing or decreasing returns to scale.
C. there are no transportation costs.
D. factors are freely mobile within a country but immobile between countries.
Answer» B. there is no perfect competition in both commodity and factor markets. all production functions are hertogenious. production function is subject to increasing or decreasing returns to scale.
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