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Suppose two countries allow both free trade in goods and free flows of factors. Why would...

Suppose two countries allow both free trade in goods and free flows of factors. Why would it be difficult to predict the extent and pattern of trade in goods between them?

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It will be difficult t predict the extent and pattern of trade in goods between them because there is no information about the goods which each produce and specializes in and also the intensity with which the factors are used in the production of goods. To determine the extent and pattern of trade in goods between them information on each factor, number of units produced by each factor etc is needed. In the absence of all the information above, it becomes difficult to determine the extent and pattern of trade between nations.

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