Suppose the Heckscher-Ohlin model was modified to allow for technology differences to exist between two trading countries. How would this change the Heckscher-Ohlin model's findings on factor prices, goods prices, and the gains from trade for each factor/industry over time? Also, explain how you would determine which good a country would import and which good a country would export.
Suppose the Heckscher-Ohlin model was modified to allow for technology differences to exist between two trading countries. How would this change the Heckscher-Ohlin model's findings on factor prices, goods prices, and the gains from trade for each factor/industry over time? Also, explain how you would determine which good a country would import and which good a country would export.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains From Trade
Section: Chapter Questions
Problem 5PA
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![Suppose the Heckscher-Ohlin model was modified to
allow for technology differences to exist between two
trading countries. How would this change the
Heckscher-Ohlin model's findings on factor prices,
goods prices, and the gains from trade for each
factor/industry over time? Also, explain how you
would determine which good a country would
import and which good a country would export.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F97ea29b6-77e4-4421-b8b8-bca46499159e%2F9a52a4b3-8d74-4c6d-a0c0-4a63d5a8da9c%2F5g7cwsg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose the Heckscher-Ohlin model was modified to
allow for technology differences to exist between two
trading countries. How would this change the
Heckscher-Ohlin model's findings on factor prices,
goods prices, and the gains from trade for each
factor/industry over time? Also, explain how you
would determine which good a country would
import and which good a country would export.
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