Q. An implication of the Heckscher-Ohlin Theorem is that
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(A)
if two countries have identical tsetse, then no trade will occur between them.
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(B)
the relative price of a country's scarce factor of production will rise when the country is opened to trade.
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(C)
income distribution in a country does not change when a country is opened to trade.
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(D)
two countries with identical tastes can still have a basis for trade if factor endowments of the countries differ and if the factor intensities of the commodities differ.
✅ Correct Answer: (D)
two countries with identical tastes can still have a basis for trade if factor endowments of the countries differ and if the factor intensities of the commodities differ.