Suppose you are in the Marvel Cinematic Universe at the end of the movie Avengers: Infinity Wars. Half the population of the world has been eliminated with a snap of Thanos' fingers (aka the elimination). Assume that you are asked to advise the leaders of Springfield, a small land-locked Asian nation. Springfield's immediate neighbors are South Korea, Russia, Turkey, India and China. Prior to the elimination, Springfield had a small population, with lots of mineral resources and a few very specialized pieces of manufacturing equipment. Springfield's primary exports are iron, copper, bauxite (the source of aluminum) and aiglets (the little plastic things on the end of shoelaces).

The capital labor ratios for several country are listed below.

K/L

Springfield

0.75

Argentina

1.1

Brazil

1.5

China

.5

India

.25

Russia

1.3

South Africa

.9

South Korea

1.8

Turkey

.7

U.S.A.

2

Use the descriptions of the world, Springfield and its potential trading partners above to answer the following questions.

Prior to elimination:

1.Prior to the elimination:

a.Using the Hecksher-Ohlin model and the information provided above; are Springfield's wages higher than their rents or vice versa? Explain why

b.Based on your answer do you think that Springfield uses capital- or labor-intensive technology in producing their exports? Why?

Springfield uses capital intensive technology.