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if you're able to help me out on this question. Much appreciated Question 5. (12 marks) In the HeckscherOhlin model, assume home is capital abundant.

if you're able to help me out on this question. Much appreciated

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Question 5. (12 marks) In the HeckscherOhlin model, assume home is capital abundant. There are two goods: computer and shoe. Computer is capitalintensive and shoe is laborintensive. Starting from the free trade equilibrium, if we downsize the home country's endowment level (shrink the endowment of capital and labor proportionally). a. Discuss its effect on the relative price of computer. (3 marks) b. Will labor or capital be better off due to this endowment change? (3 marks) c. What is the effect on labor/capital ratio in computer production? (3 marks) (1. Will it change the trade pattern (or comparative advantage) between Home and Foreign

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