According to the Heckscher-Ohlin theory, a country will have a comparative advantage in the production of goods that:

CA Foundation · Business Economics · RTP · January 2026
According to the Heckscher-Ohlin theory, a country will have a comparative advantage in the production of goods that:
(A) A. Require labour-intensive techniques if the country has a surplus of capital.
(B) B. Utilize abundant factors of production that the country has in large supply.
(C) C. Require advanced technology in which the country is technologically superior.
(D) D. Require high labour costs in a country with low wages.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Utilize abundant factors of production that the country has in large supply.

Topics: International Trade

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