Heckscher-Ohlin model

Consider a country producing computers and shoes. Computer produc- tion is labor intensive and shoes production is capital intensive. Using a suitable

diagram show

(a) What would happen to each sector within the country if it received immigra- tion while the capital stock remain fixed. Be sure to identify the amount of

capital and labor used in each sector before and after immigration.

(b) What would happen to each sector within the country if there was an earth- quake that destroyed capital stock while labor remains fixed. Be sure to iden- tify the amount of capital and labor used in each sector before and after the

change.