An important assumption in the Heckscher-Ohlin model is that the tastes are the same in both...

An important assumption in the Heckscher-Ohlin model is that the tastes are the same in both countries. Suppose that tastes are different in the Home and Foreign for the two goods, airplanes and shirts. Is it possible for a capital-abundant country (Foreign) to export the labor-intensive good (shirts) if tastes are different? If so, draw a PPF-indifference curve diagram for Home and a PPF indifference curve diagram for Foreign that illustrates this case.

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Rahul Sunny answered 1 year ago

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