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Q. Countries that are willing to tolerate an unusually high quantity of pollution relative to their supplies of other factors would leads to export "pollution-intensive" goods. Discuss using the Hechscher-Ohlin (H.O.) model.
Answer: This statement is deficiently crafted. It appears to imply that pollution per say is a proper factor of production. Namely, just like if you add a worker, you obtain additional product, thus the marginal product of pollution is positive. The trouble here is that pollution isn't really a factor of production, but somewhat an externality, which may perhaps be more typical of imported goods than exported ones. In such a case that, the above statement is false.
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Q. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it could choose to produce at which point in the diagram above? Sup
ABOUT THIS THEORY
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Q. Refute the claim by mercantilists who claimed that without severe restrictions on international trade and payments, a country might find itself impoverished and without an adequ
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