Equalisation of Factor Prices by Sufficiently Diversified Production Under Conditions of Balanced Demand
If we have two factors (‘labour and land’) and one good, the slightest geographical difference in factor endowments will make factor prices unequal. If a second good is added that differs not at all in factor intensities from the first, the same conclusion holds.
KeywordsFactor Intensity International Trade Factor Price Factor Endowment Factor Share
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