In the Hecksher-Ohlm Model, the choice of the mix of inputs, that is labor to-Ca

Question

In the Hecksher-Ohlm Model, the choice of the mix of inputs, that is labor to-Capital (l/K), depends on two the following. relative income levels relative good prices relative factor prices relative interest rates (ii) and (iv) (i) and (iii) (ii) and (iii) (i) and (ii) Use Toble 1 below to answer Questions 11. Which country is Capital-abundant? United States Austalia Both Use Toble 2 below to answer Questions 12. Which country is relatively labor-intensive in cloth production? United States Austalia Both Suppose both Japan and Brazil then car production must be in order for Japan to export Labor-intensive; Cars Capital-intensive; Sugar Labor-intensive; Sugar Capital-intensive; Cars

Explanation / Answer

H-O assumes that factor and commodity prices are same. so (c)

US is capital intensive or abudant

Australia is labor intensive for cloth production

car production must be capital intensive in order for Japan to export cars

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