In the discussion of empirical results on the Heckscher-Ohlin model, we noted that recent work suggests...

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In the discussion of empirical results on the Heckscher-Ohlin model, we noted that recent work suggests that the efficiency of factors of production seems to differ internationally. Explain how this would affect the concept of factor-price equalization. O A. Although efficiency differences were not anticipated by the Heckscher-Ohlin model, they do not significantly alter the concept of factor-price equalization. O B. Efficiency differences are incorporated in the Heckscher-Ohlin model so there is no effect on the concept of factor-price equalization. O C. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would be equalized. O D. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would not be equalized. In the discussion of empirical results on the Heckscher-Ohlin model, we noted that recent work suggests that the efficiency of factors of production seems to differ internationally. Explain how this would affect the concept of factor-price equalization. O A. Although efficiency differences were not anticipated by the Heckscher-Ohlin model, they do not significantly alter the concept of factor-price equalization. O B. Efficiency differences are incorporated in the Heckscher-Ohlin model so there is no effect on the concept of factor-price equalization. O C. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would be equalized. O D. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would not be equalized.

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the correct option is c The model would be applied toeffective factors which adjust for ... View the full answer