Multiple choice Which of the following assumptions is not associated with Stopler-Samuelson theorem? There is perfect competition in factor and commodity markets. Production functions of both commodities are linear and homogenous of degree one. There are two countries which trade with each other and analysis is geometrically based on both countries. These two commodities are produced with only two factors, labour and capital. The terms of trade between the two countries remain unchanged. Reveal answer Fill a bubble to check yourself C Correct answer Explanation No, as Stopler-Samuelson theorem is related on the assumption that there are two countries which trade with each other, but analysis is geometrically confined to one country.