The endowment of labor and capital in United States and Mexico are given in the table. You should use the results of the Heckscher - Ohlin model to answer this question. You will have to calculate capital to labor (K/L) ratios and/or Labor to Capital (L/K) ratios.

United States Mexico

Capital 50 machines 40 machines

Labor 125 workers 160 workers

Both U.S. and Mexico produce computers and food, computers are relatively capital intensive (the K/L ratio for computers is higher than the K/L ratio for food), which means that food is relatively more labor intensive than computers.

(a) Which country is relatively more abundant in capital? Please explain.

(b) Which country is relatively more abundant in labor? Please explain.

(c) Which country has a comparative advantage in the production of computers? Please explain.

(d) Which country has a comparative advantage in the production of food? Please explain