Q. Which among the following is an assumption of H-O Theorem
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(A)
each commodity that a nation produce differs in factor intensity. trade is free i.e. there are no trade restrictions in the form of tariffs or non-tariff barriers.
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(B)
the production function remains the same in different countries for the same commodity. for e.g. if commodity a requires more capital in one country then same is the case in other country.
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(C)
there is full employment of resources in both countries and demand is identical in both countries.
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(D)
all the above
✅ Correct Answer: (A)
each commodity that a nation produce differs in factor intensity. trade is free i.e. there are no trade restrictions in the form of tariffs or non-tariff barriers.