Assume the production of chocolate is capital-intensive and the production of fruit is labor-intensive. Albania is labor- abundant, while Germany is capital-abundant. According to the Heckscher-Ohlin theory of trade: Albania has the comparative advantage in chocolate Germany has the comparative advantage in chocolate Albania will import fruit Germany will import chocolate

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter28: International Trade
Section: Chapter Questions
Problem 2P
icon
Related questions
Question

Hello, I keep getting this question wrong on my practice hw but im not sure what im doing wrong.

Assume the production of chocolate is capital-intensive and the production of fruit is labor-intensive. Albania is labor-
abundant, while Germany is capital-abundant. According to the Heckscher-Ohlin theory of trade:
Albania has the comparative advantage in chocolate
Germany has the comparative advantage in chocolate
Albania will import fruit
Germany will import chocolate
Transcribed Image Text:Assume the production of chocolate is capital-intensive and the production of fruit is labor-intensive. Albania is labor- abundant, while Germany is capital-abundant. According to the Heckscher-Ohlin theory of trade: Albania has the comparative advantage in chocolate Germany has the comparative advantage in chocolate Albania will import fruit Germany will import chocolate
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Risk
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Survey Of Economics
Survey Of Economics
Economics
ISBN:
9781337111522
Author:
Tucker, Irvin B.
Publisher:
Cengage,
MACROECONOMICS FOR TODAY
MACROECONOMICS FOR TODAY
Economics
ISBN:
9781337613057
Author:
Tucker
Publisher:
CENGAGE L
Micro Economics For Today
Micro Economics For Today
Economics
ISBN:
9781337613064
Author:
Tucker, Irvin B.
Publisher:
Cengage,
Economics For Today
Economics For Today
Economics
ISBN:
9781337613040
Author:
Tucker
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning