Which of these is a key mathematical tool in the Heckscher-Ohlin model?
Probability distributions
Factor price equalization
Standard deviation
Statistical correlation
Answer
Factor price equalization is a key mathematical tool in the Heckscher-Ohlin model, which explains international trade. It states that in a two-country, two-good, two-factor model, the price of factors of production will be equalized across countries in the long run.
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