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

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Definitions:

Weather Patterns

Predominant behaviors or trends in weather conditions over a specific period, often influencing climate analysis.

Humidity

The amount of water vapor present in the air, usually expressed as a percentage.

Precipitation

Any form of water, liquid or solid (rain, snow, hail, sleet), that falls from clouds and reaches the ground.

Screen Size

The diagonal measurement of a screen or display, typically measured in inches, representing the size of the visual display area.