Theories to explain national trade patterns - What is the factor proportions theory?

3 important questions on Theories to explain national trade patterns - What is the factor proportions theory?

Why is a general observation not always correct?

Production factors such as land and labour are not homogenous

Why is process technology an important motive?

Companies may substitute capital for labor, depending on the cost of each.

Why is product technology an important motive?

Most new products originate in developed countries.

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