Question 1
(a) Interpret the prediction of Hecksher-Ohlin theorem oninternational trade in the exports and imports.
(b) Determine three (3) critical assumptions of a simplistic andspecific version of Hecksher-Ohlin theory for gains in trade, whichcan be challenged as not true in the real world?
(c) Demonstrate why the highly restrictive assumption ofHecksher-Ohlin theorem that determines the pattern of internationaltrade, which is also referred to as the factor proportion theory,is also deemed as unrealistic?
