____________states that at constant commodity prices, an increase in the quantity of one factor increases the production of the commodity intensive in this factor and reduces the output of the other commodity which is intensive in the constant factor.

Related MCQs

• If a commodity is classified as "labor-intensive" at one set of relative factor prices but "capital-intensive" at another set of relative prices, this situation is known as
• A situation where one commodity is capital intensive in one country and labour intensive in another country is called
• When a commodity is produced with low K/L ratio that commodity is ______ intensive commodity
• ------------theory states that countries which are rich in labour will export labour intensive goods and countries which are rich in capital will export capital intensive goods
• Countries H and F operate in an H-O world. Each country produces two goods, A and B. Good A is relatively capital intensive and country F is relatively labor abundant. Suppose however, that the production technology is not the same in the two countries. That is, H has a superior technology of production compared to F.
• The quantity of dollars supplied to the foreign Exchange market would increase if, other things remaining equal:
• The amount of commodity a nation is willing to give up to get an additional unit of another commodity and still remain on the same indifference curve is known as
• The curve that shows howmuch of its import commodity a nation requires in exchange for various quantities of its export commodity is
• The H O theory postulates that as a result of trade the differences in factor prices between nations
• “Free trade between two countries in H O model will equalize relative factor prices provided there is incomplete specialization.” This is