Unit 4 Individual Project

Robert T. Franklin

American Intercontinental University Online

Unit 5 IP

1. According to James E. Anderson, Heckscher Ohlin trade theory predicts that trade allows countries to put away factor services as if it were in a totally conformed world, smoothing out differences in national factor endowment. Heckscher Ohlin theory of comparative advantage was created as an alternative to the Ricardian model and had a rastional duty. The differences in labor productivity were the explanation given by Ricardo for comparative advantage. Trade is due to differences in relative prices that would obtain in the absence of trade, and an average of each country’s citizens gain from such trade. 2. The distribution of income is affected by trade and is controlled by trading partners as well as in clearing up international trade patterns in such a way that countries have similar continuous returns to scale production functions for each good, but different amounts of capital relative to their labor supply. In the lack of trade, goods which call for large amounts of labor comparative to capital would be relatively less expensive in the other labor rich countries and relatively be of different economic transition of comparative advantage that countries exports goods would have lower relative prices in the absence of trade as this theory is one that is likely to occur to many economist as they approach the problem, one in which contains labor, land and capital is exogenous to a small country in terms of prices according to ivy thesis.com. 3. Leontief wrote a paper in 1953 entitled Domestic Production and Foreign Trade to challenge the general advantage of the factor endowment model. Leontief reviewed data with the purpose of showing the capital labor ratio of USA exports being