Explain the Heckscher-Ohlin theorem
What will be an ideal response?
The Heckscher-Olin theorem is a theory that explains the existence of a country's comparative advantage by its factor endowments. A country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product.
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The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a dozen eggs?
A) $1.50 B) $2.50 C) 1 2/3 gallons of milk D) 3/5 of a gallon of milk
The euro is
A) the currency of all nations in Europe. B) the rate at which the French central bank makes discount loans. C) a common currency of many European countries. D) the name of the European central bank.