Q. Which among the following is NOT an assumption of H-O Theorem
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(A)
there are two countries involved. each country has two factors (labour andcapital) and produce two commodities either labour intensively or capital intensively.
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(B)
there is no perfect competition in both commodity and factor markets. all production functions are hertogenious. production function is subject to increasing or decreasing returns to scale.
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(C)
there are no transportation costs.
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(D)
factors are freely mobile within a country but immobile between countries.
✅ Correct Answer: (B)
there is no perfect competition in both commodity and factor markets. all production functions are hertogenious. production function is subject to increasing or decreasing returns to scale.