Question

Which of the following is NOT a proposition of the Heckscher-Ohlin model? Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur. If the United States is a skilled labor abundant country, then the United States has a comparative advantage in the production of goods that use skilled labor more intensively. The effect of international trade is to tend to equalize factor prices between the trading nations. A country has a comparative advantage in the production of that commodity which uses more intensively the country's more abundant resource.

Answer 1

First option: Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur.

Step-by-step explanation:

Countries produce a surplus of the product in which they specialize and trade it for a different surplus good of another country. The traders decide on whether they should export or import goods depending on comparative advantages. Imagine that there are two countries and both countries produce only two products.

Answer 2

Countries will completely specialize in the product in which they have a comparative advantage if free trade is allowed to occur. ( first choice)