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In the discussion of empirical results on the Heckscher-Ohlin model, we noted that recent work suggests that the efficiency of factors of production seems
In the discussion of empirical results on the Heckscher-Ohlin model, we noted that recent work suggests that the efficiency of factors of production seems to differ internationally. Explain how this would affect the concept of factor-price equalization. O A. Although efficiency differences were not anticipated by the Heckscher-Ohlin model, they do not significantly alter the concept of factor-price equalization. O B. Efficiency differences are incorporated in the Heckscher-Ohlin model so there is no effect on the concept of factor-price equalization. O C. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would be equalized. O D. The model would be applied to "effective factors" which adjust for the differences in efficiency. In this case, effective factor prices would not be equalized.
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