If the production of widgets is inherently capital intensive then:
A) widgets would tend to be exported from labor-abundant countries.
B) widgets would tend to be imported by labor-abundant countries.
C) widgets would tend to be exported from countries with a lot of bauxite.
D) widgets would tend to be imported by capital-abundant countries.
E) widgets would not be produced in a high K/L ratio country.

Question

Quizplus · Accepted Answer

Capital-intensive production implies that the process requires a significant amount of capital (machinery, equipment, etc.) relative to labor. Labor-abundant countries, which have a relative abundance of labor but may lack capital, would find it less cost-effective to produce such goods domestically. Therefore, they would tend to import these goods from countries where capital is more abundant and the production of such goods is more economically feasible.

If the Production of Widgets Is Inherently Capital Intensive Then