Assume a Two-Country Two-Good Two-Input Model Where the Following Relationships

question 39

Multiple Choice

Assume a two-country two-good two-input model where the following relationships hold: (K/L) _U.S. > (K/L) _ROW
(K/L) _automobiles > (K/L) _shoes
Where (K/L) _U.S. is the capital-labor ratio in the United States, (K/L) _ROW is the capital-labor ratio in the Rest of the World, (K/L) _automobiles indicates the capital-labor ratio in the production of automobiles, and (K/L) _shoes indicates the capital-labor ratio in the production of shoes. Assume further that technology and tastes are the same in the United States and the Rest of the World. If trade opens up between the United States and the Rest of the World, according to the Heckscher-Ohlin model, the Rest of the World will export _____ and import _____.

• A)both the goods; neither good
• B)shoes; automobiles
• C)automobiles; shoes
• D)neither good; both of the goods

---

Definitions:

Pectoral Girdle

The skeletal framework of the shoulder region that supports arm movement, consisting of the scapulae and clavicles.

Clavicles

Long bones that serve as a strut between the shoulder blade and the sternum, also known as collarbones.

Scapulae

The pair of flat bones located on each side of the upper back, commonly known as shoulder blades.

Glenoid Cavity

A shallow depression on the scapula that articulates with the head of the humerus to form the shoulder joint.