1. The following are all assumptions that must be accepted in order to apply the Heckscher-Ohlin Theory, except for one:A. countries differ in their endowments of factors of production.B. countries differ in their technologies.C. there are two factors of production.D. one product always requires more machines per worker in its production than does the other product.
Question
- The following are all assumptions that must be accepted in order to apply the Heckscher-Ohlin Theory, except for one:A. countries differ in their endowments of factors of production.B. countries differ in their technologies.C. there are two factors of production.D. one product always requires more machines per worker in its production than does the other product.
Solution
To answer the question, we need to identify the assumption that is not required to apply the Heckscher-Ohlin Theory. Let's go through each option:
A. The assumption that countries differ in their endowments of factors of production is a fundamental assumption of the Heckscher-Ohlin Theory. It states that countries have different amounts of resources such as labor, capital, and land.
B. The assumption that countries differ in their technologies is also a key assumption of the theory. It suggests that countries have different levels of technological advancement, which can affect their comparative advantage in producing certain goods.
C. The assumption that there are two factors of production is another essential assumption of the theory. It posits that production is determined by the combination of labor and capital inputs.
D. The assumption that one product always requires more machines per worker in its production than the other product is not necessary for the Heckscher-Ohlin Theory. This assumption is related to the concept of capital intensity, which is not a requirement for the theory to be applied.
Therefore, the correct answer is D. One product always requires more machines per worker in its production than does the other product.
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