A difference in factor endowments will cause the production frontiers of two nations to be shaped differently.
Question:
(a) What else could cause their production frontiers to have different shapes?
(b) What assumption made by Heckscher and Ohlin prevented this in the Heckscher–Ohlin model?
(c) What are other possible causes of a difference in relative commodity prices between the two nations in the absence of trade?
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a Besides a difference in factor endowments the production frontier of two nations could dif...View the full answer
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