Question

Relative to Kenya, Japan has relatively higher economies of large-scale production, an abundance of resources, higher labor costs, and more research and development. The Heckscher-Ohlin theory explains Japan’s comparative advantage over Kenya as the result of differences in countries'

a. relative costs of labor
b. economies of large-scale production
c. research and development
d. relative abundance of various resources.

Answer 1

Answer:

a. relative costs of labor

Explanation:

The Heckscher-Ohlin theory explains Japan’s comparative advantage over Kenya as the result of differences in countries' relative costs of labor.

The Heckscher-Ohlin theory of comparative advantage predicts patterns of commerce and production based on the factors that a particular trading region's (country, state etc.) is endowed with or has in plentiful amount. The model is particular about the export of goods requiring factors of production that are plentiful in a particular region.

The four factors of production are land, labor, entrepreneur and capital. Of all the factors compared between Kenya and Japan, their relative labour cost is the only direct factor of production compared between them.