U. S. exports are less capital-intensive than U. S. imports, despite the relative abundance of capital in the country. This is in opposition to the Heckscher-Ohlin theory and has been labelleda. a zero-sum game. b. Leontief's paradox. c. a positive-sum game. d. Samuelson's critique. e. a first-mover advantage.

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Business

Sandra Grimes

9 April, 04:23

U. S. exports are less capital-intensive than U. S. imports, despite the relative abundance of capital in the country. This is in opposition to the Heckscher-Ohlin theory and has been labelleda. a zero-sum game. b. Leontief's paradox. c. a positive-sum game. d. Samuelson's critique. e. a first-mover advantage.

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Ezekiel Fuller · Answer 1

The correct answer is option b.

Explanation:

According to the Heckscher-Ohlin theory, a capital abundant country specializes in capital intensive goods. Thus it produces capital intensive goods and exports them, and imports labor-intensive good.

But this does not prove right in the case of the US. Being a capital intensive country it imports capital intensive goods and exports labor-intensive goods.

This was proved by W. Leontief through empirical evidence. Thus, it is called the Leontief paradox.