If Country I Is Defined as "Relatively Capital-Abundant" in Relation

question 28

Multiple Choice

If country I is defined as "relatively capital-abundant" in relation to country II by the "price" (or "economic") definition of factor abundance, then the price of labor relative to the price of capital is __________ in country I than in country II, and the Heckscher-Ohlin theorem would suggest that country I would export relatively __________ goods to country II.

• A) higher; capital-intensive
• B) higher; labor-intensive
• C) lower; capital-intensive
• D) lower; labor-intensive

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Definitions:

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