As an international economist you have been asked to prepare a short speech which answers the following questions:
• How does the Heckscher-Ohlin theory differ from Ricardian theory in explaining international trade patterns?
• The theory demonstrates how trade affects the distribution of income within trading partners. Explain.
• How does the Leontief paradox challenge the overall applicability of the factor-endowment model?
• According to Staffan Linder, there are two explanations of international trade patterns—one for manufacturers and another for primary (agricultural) goods. Explain.
• Following that speech, the audience asks you to respond to the following question:
• Describe a specific tariff, an ad valorem tariff, and a compound tariff. What are the advantages and disadvantages of each?
The question belongs to Economics and it is about the differences between Heckscher-Ohlin theory and Ricardian theory in explaining international trade patterns. These two theories are based on several assumptions and all these assumptions such as the expectations of most people from different countries and market assumptions have been considered.
Total Word Count 795