Question
Suppose that the United States drops the trade embargo on Cuba, and Cuba imports automobiles (a capital-intensive good) from the United States. a) According to
Suppose that the United States drops the trade embargo on Cuba, and Cuba imports automobiles (a capital-intensive good) from the United States.
a) According to the Heckscher-Ohlin theorem, is Cuba capital abundant or labor abundant vis--vis the United States? Briefly explain your answer.
b) What would be the impact of ending the embargo on the real wage in Cuba? Why?
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Labor Economics
Authors: George J. Borjas
6th edition
73523208, 2900073523209 , 978-0073523200
