Q. An implication of the Heckscher-Ohlin Theorem is that (Solved)
1. if two countries have identical tsetse, then no trade will occur between them.
2. the relative price of a country's scarce factor of production will rise when the country is opened to trade.
3. income distribution in a country does not change when a country is opened to trade.
4. two countries with identical tastes can still have a basis for trade if factor endowments of the countries differ and if the factor intensities of the commodities differ.
- d. two countries with identical tastes can still have a basis for trade if factor endowments of the countries differ and if the factor intensities of the commodities differ.