I couldn't fit these questions in the picture.3. Employment in the X industry in Nation I?4. Production of Y in Nation II?

The following question relates to the H - O theory of trade. Suppose there are two countries, Nation I and Nation II where two goods are produced, X and Y using two resources, labor and capital. X is a relatively capital intensive and Y is relatively labor intensive. The two countries have identical preferences. (a) Refer to the graph below. Which country has a relative abundance of labor? What explains the shape of the two PPCs? What is the implication about the opportunity cost of X and the opportunity cost of Y? Y Nation 2 140 Nation 1 B'