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22 December, 10:58

According the Heckscher-Ohlin model, international trade tends to Group of answer choices Cause the price of the scarce factor of production to increase and the price of the abundant factor to decrease Cause the price of the scarce factor of production to decrease and the price of the abundant factor to increase Cause all prices of the factor of production to increase. Have no effect on the prices of the factors of production.

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  1. 22 December, 11:16
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    Cause the price of the scarce factor of production to decrease and the price of the abundant factor to increase.

    Explanation:

    Heckscher-Ohlin model states that when countries trade they tend to export products that they have abundant resources to produce, and import products that resources to produce are scarce.

    It also assumes that as production increases the price of the abundant resources rises.

    Since the scarce resources are being imported there will be excess in the economy and price of scarce resources will decrease.
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