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Consider the following data on factor endowments of two countries, A & B. Countries FactorEndowmentsAB Labor force (in millions of workers)4520 Capital stock (in thousands
Consider the following data on factor endowments of two countries, A & B.
Countries
FactorEndowmentsAB
Labor force (in millions of workers)4520
Capital stock (in thousands of machines)1510
a.Which country is relatively capital intensive?
b.Which country is relatively labor intensive?
c.Suppose that good S is capital intensive relative to good T, which country will have comparative advantage in the production of S? Explain.
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