Differences in the opportunity costs of production

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According to the HO theory, the basis for the movement of goods and services (international trade) across national boundaries is the differences in the opportunity costs of production (which translates into differences in the prices of goods and services being traded). Just like goods and services, we also know that both Labor and Capital move across national boundaries (from one country to another country). Briefly state what underlies (explains) the international movement of factors of production (i.e., why labor and/or capital moves from one country to another country?).

Reference no: EM131173956

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