Homework 3 - CH4 - ECO369 International Economic Issues...

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ECO369 International Economic Issues GVSU, Wei Sun Homework 3 – Chapter 4 Heckscher-Ohlin Model General Instructions: Write your answers clearly on Letter size paper. Mark the order of the questions. Please do NOT copy the questions. Answer questions 1-13 using the following given information about factor endowments in table 1 and factor-intensity in table 2. Table 1: Factor Endowment A B Capital 40 machines 10 machines Labor 200 workers 60 workers Table 2: Factor Intensity (per unit of product) Bread Steel Capital 1 machine 2 machines Labor 8 workers 8 workers 1. Which country is relatively labor-abundant? Which country is relatively capital- abundant? 2. Which good, bread or steel, is relatively capital-intensive? Labor-intensive? 3. Which country has a comparative advantage in bread? Steel? 4. Draw A’s PPF. (Place Steel along the horizontal axis and Bread along the vertical axis. This is a rough graph, but it must show the pattern of factor endowments.) 5. Suppose that in autarky, country A is at a point along its PPF where it produces
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This note was uploaded on 12/14/2010 for the course ECO 369 taught by Professor Sun during the Fall '10 term at Grand Valley State University.

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Homework 3 - CH4 - ECO369 International Economic Issues...

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