Midterm1-462_SAMPLE

B china will shift resources into the production of

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Unformatted text preview: l shift resources into the production of agricultural goods and away from manufactured goods. (c) China will shift resources out of the production of agricultural goods and into the production of labor-intensive goods. (d) China will export capital-intensive goods like automobiles and import laborintensive goods like clothing. 3 FBE 462 Sample Midterm #1 Use the information below to answer the two question that follows immediately: Assume a two-country, two-good, two-factor of production world where the following relationships hold: > (K/L)US (K/L)automobiles > (K/L)ROW (K/L)shoes where (K/L)US 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 is the capital-labor ratio in the production of automobiles, and (K/L)shoes is 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. 9. Ch4.29 The relationships shown above indicate that the United States is: (a) A capital-intensive country. (b) Scarce in...
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This note was uploaded on 02/15/2011 for the course FBE 462 at USC.

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