Essay
(a) Explain how the Heckscher-Ohlin theorem is obtained, using either the "physical" definition or the "price" (or "economic") definition of relative
factor abundance.
(b) Illustrate and explain the phenomenon of a "factor intensity reversal." If two countries are trading in a situation where such a reversal has occurred, can the Stolper-Samuelson theorem still be valid for both of the countries? Briefly explain.
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(a) The Heckscher-Ohlin theorem is obtai...View Answer
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