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Q.. "A good cannot be both land- and labor-intensive." Discuss.
Answer: In a two good or two factor models for instance the original Heckscher-Ohlin framework and the factor intensities are relative intensities. Therefore, the relevant statistic is also workers per acre (or acres per worker) or rental per wage or wage per rental unit. In order to exemplify the logic of the statement above, let us suppose that the production of a broom requires 4 workers and 1 acre. As well, let us suppose that the production of one bushel of wheat requires 40 workers and 80 acres. In this case the acres per person necessary to produce a broom is one quarter, where to produce a bushel of wheat requires 2 acres per person. The wheat is thus (relatively) land intensive furthermore the broom is (relatively) labour intensive.
Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar
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Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.
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#question.explain me Hecksher OHLIN theory of international trade in simple english
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