difference between product price ration and factor price ratio
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Explanation:
The factor-price equalization theorem says that when the product prices are equalized between countries as they move to free trade in the H-O model, then the prices of the factors (capital and labor) will also be equalized between countries.
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if the price of one factor rises relatively to that of the other factor, then the price of the good intensive in that factor will rise relatively to that of the other good.
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