What are the main preconditions for international trade according to Heckscher-Ohlin model? Select one – the most appropriate answer considering provisions of specific factors mode.

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To approach this question, I will evaluate what each option asserts as a precondition for international trade within the Heckscher-Ohlin framework, taking into account the specific factors variation.
Option 1: 'Availability of resources in an economy and effectiveness of their usage.' This aligns with the core idea of the Heckscher-Ohlin model, which emphasizes factor endowments (land, labor, capital) and how their abundance and efficient use shape comparative advantages and trade patterns. Even in a specific-factors context, the existence and effective use of resources remain foundational prerequisites for trade since without resources to endow a country, there would be nothing to trade. This option captures the essential precondition more broadly and plausibly.
Option 2: 'Comparative advantage of an economy in producing one or another good.' While comparative advantage is a central outcome and explanation for trade in many theories, it is not a precondition in the Heckscher-Ohlin framework. HO explains why comparative advantage arises (due to factor endowments) rather than assuming it as a starting precondition. Thus this choice is more of an implication than a foundational precondition and is less precise as a starting requirement.
Option 3: 'Availability of more production factors compared to what is assumed by other models.' This statement is vague and comparative to other models rather than stating a concrete precondition. The HO model does not require there to be more factors than other models; it requires the right mix of factors (endowments) and their mobility conditions. As written, the option is not a precise precondition and can be misleading.
Option 4: 'Production factors scarcity.' Scarcity is a general economic pressure but not a distinctive precondition singled out by the HO model. The model centers on how the relative abundance of factors drives trade, not on scarcity per se as an isolated condition. This option is too narrow and misconstrues the core emphasis of HO.
Option 5: 'Mobility of production factors between different sectors and their ability to be shifted in the short run.' In the specific factors model, some factors are immobile across sectors in the short run, which contrasts with the pure HO assumption of broader factor mobility in the long run. Therefore, asserting broad short-run mobility as a precondition is inconsistent with the specific factors framework. This makes this option incorrect for the scenario described.

econ_420_120255_249094 Lesson 5 Quiz 1

What are the main preconditions for international trade according to Heckscher-Ohlin model? Select one – the most appropriate answer considering provisions of specific factors mode.

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