Heckscher-Ohlin Model: It is the model of international trade based on comparative advantage principle. It is also called H-O model. According to H.O model, the country has a comparative advantage in the production of those goods whose factors of productions are abundantly available. It means that the abundant factor has large use in the production of goods. It specifies that international trade increase the wage of labors which are intensively used in the production. Take an example America is capital-intensive nation, export of capital increases the wages of skilled labor.

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 5, Problem 3P

To determine

Concept Introduction:

Heckscher-Ohlin Model:

It is the model of international trade based on comparative advantage principle. It is also called H-O model. According to H.O model, the country has a comparative advantage in the production of those goods whose factors of productions are abundantly available. It means that the abundant factor has large use in the production of goods.

It specifies that international trade increase the wage of labors which are intensively used in the production. Take an example America is capital-intensive nation, export of capital increases the wages of skilled labor.

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The African Continental Free Trade Area is a key strategic agreement undertaken by the African Union in recent years. Choose a case from amongst the countries listed below and discuss the challenges and opportunities which exist for this country in entering into this agreement. You can choose a particular industry or product which the country exports/imports to make your case. Lesotho Ghana Mozambique

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 5, Problem 3P

To determine

Concept Introduction:

Heckscher-Ohlin Model:

It is the model of international trade based on comparative advantage principle. It is also called H-O model. According to H.O model, the country has a comparative advantage in the production of those goods whose factors of productions are abundantly available. It means that the abundant factor has large use in the production of goods.

It specifies that international trade increase the wage of labors which are intensively used in the production. Take an example America is capital-intensive nation, export of capital increases the wages of skilled labor.

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Answer 3

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 5, Problem 3P

To determine

Concept Introduction:

Heckscher-Ohlin Model:

It is the model of international trade based on comparative advantage principle. It is also called H-O model. According to H.O model, the country has a comparative advantage in the production of those goods whose factors of productions are abundantly available. It means that the abundant factor has large use in the production of goods.

It specifies that international trade increase the wage of labors which are intensively used in the production. Take an example America is capital-intensive nation, export of capital increases the wages of skilled labor.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 5, Problem 3P

To determine