In 2005, Canada exported 13,000 tonnes of lumber to Japan and imported 500 tonnes of

lumber from Japan.

a. Explain what factor of production is likely used most intensively in producing lumber and

why.

b. Explain the Heckscher-Ohlin Theorem and what factors of production are likely present

and absent in each country. Also explain if the H-O theory is accurate in this case.

b. According to the Stolper Samuelson Theorem, who in Canada is made better off due to

trade in lumber with Japan and why?