The document outlines the Heckscher-Ohlin model of international trade. The model assumes two countries, two goods, and two factors of production (labor and land). It is assumed that each country has a relative abundance in one of the two factors. The labor-abundant country will export and specialize in the good that uses its abundant factor intensively. Free trade equalizes factor prices between the countries and benefits the owners of each country's abundant factor through increased productivity.