Question: 9. Resources and Trade: The Heckscher-Ohlin Model (chapter 5) This exercise addressed Factor-Price Equalization. (a) Will free trade and perfect competition lead to an equalization

9. Resources and Trade: The Heckscher-Ohlin Model (chapter 5) This exercise addressed Factor-Price Equalization. (a) Will free trade and perfect competition lead to an equalization of wage rates across countries in theory? Explain. (b) In a real world situation: Why do wage rates greatly vary between "developed" and "developing" countries in the same economic sector, even after the adoption of free trade?

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