Heckscher-Ohlin Model

Introduction to Heckscher-Ohlin Model

The Heckscher-Ohlin Model is an economic theory that explains international trade patterns. The formula represents the production of a good, where K represents capital, L represents labor, and Q represents the quantity of the good produced. The result signifies the output of the production process. This model assumes constant returns to scale, perfect competition, and identical technologies.

Parameter usage:

• K= capital input
• L= labor input
• Q= quantity of the good produced

Example valid values:

• K= 100, L= 50, Q= 10

Output:

• output= quantity of the good produced

Data validation

The numbers should be positive and real.

Summary

This model helps in understanding the relationship between the factors of production and the output in international trade.