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The H-O model assumes a world in which factors of production cannot move but goods can. In terms of output prices and factor prices, explain

  1. The H-O model assumes a world in which factors of production cannot move but goods can. In terms of output prices and factor prices, explain what (if anything) would be different about a world in which there was complete factor mobility but no trade versus a world in which there was absolutely free trade but no factor mobility.
  2. In the United States, labor unions consistently oppose international trade and support trade barriers. Use the Hecksher-Ohlin model to explain why.
  3. explain how and why the manufacturing production of industrialized countries has decreased, even though these countries have a comparative advantage in some manufactured goods. Be sure to include all relevant factors.

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