Given all the necessary assumptions of the Heckscher-Ohlin-Samuelson theory of trade, free trade leads to complete equalization of factor prices in the two trading countries if
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JNU SIS 2015 Question 12: Theories of international trade
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Theories of international trade has come up 151 times in 6 exams since 2006.
What this question tests
This question is on Factor price equalisation and the Stolper-Samuelson theorem, part of Theories of international trade in International Economics.
How trade changes returns to factors and whether it equalises them across countries.
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