Question

Pick a country, identify its key resources and its major exports and imports. Decide whether the country’s trade pattern supports the Heckscher-Ohlin Theorem. Why trade pattern support or doesn't support HO theorem?

Answer 1

Ans:-

Let the country be Sri Lanka, it's major natural resources consists of limestone, graphite, mineral sands, gems, phosphates, clay, fisheries etc.

Sri Lanka's major exports includes :-

Diamonds.
Emeralds.
Rubies.
Coconut products.
Rubber manufactures.
Fish.

Sri Lanka's major imports includes:-

Petroleum.
Foodstuffs.
Machinery and transportation equipment.

Country's trade patterns supports the Heckscher- Ohlin theorem, as according to the theorem, a country export the goods using it's abundant factors intensively and imports the goods which uses it's scarce factors intensively.

And as, Sri lanka has vast reserve of gems, it is its abundant factor, which it is using as export.

And as, Sri lanka has less petroleum reserve, it is its scarce factor, which it is importing from other countries.