There Are Many Real-Life Examples of Factor-Intensity (The Ratio of Capital

Multiple Choice

There are many real-life examples of factor-intensity (the ratio of capital to labor) differences in the same industries in different nations. How does the Heckscher-Ohlin model handle this?

A) The Heckscher-Ohlin model makes no assumptions about different factor intensities.
B) The Heckscher-Ohlin model assumes that all firms require equal amounts of capital and labor just to be on the safe side.
C) The Heckscher-Ohlin model ignores the possibility of different factor intensities and instead assumes that each industry has the same factor intensity in every nation.
D) Factor-intensity differences do not change the predictive value of the model.