Consider the Hecksher-Ohlin model. Let the total endowment of capital in Home and Foreign be 30 and 20 units, respectively. Let the total endowment of labour in Home and Foreign be 20 and 10 units, respectively. Which of the statement below is true? A. If there is trade, Foreign will export the labour intensive good B. Home is capital-abundant C. Foreign is labour-abundant D. Home has comparative advantage in the labour intensive good E. There's insufficient information to discuss comparative advantage
Consider the Hecksher-Ohlin model. Let the total endowment of capital in Home and Foreign be 30 and 20 units, respectively. Let the total endowment of labour in Home and Foreign be 20 and 10 units, respectively. Which of the statement below is true? A. If there is trade, Foreign will export the labour intensive good B. Home is capital-abundant C. Foreign is labour-abundant D. Home has comparative advantage in the labour intensive good E. There's insufficient information to discuss comparative advantage
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the Hecksher-Ohlin model. Let the total endowment of capital in Home and Foreign be 30 and 20 units, respectively. Let the total endowment of labour in Home and Foreign be 20 and 10 units, respectively. Which of the statement below is true?
A. If there is trade, Foreign will export the labour intensive good
B. Home is capital-abundant
C. Foreign is labour-abundant
D. Home has
E. There's insufficient information to discuss comparative advantage
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