Reference: Ref 49
(Table: Factor Use in Latvian Trade) According to the
HeckscherOhlin model, Latvia's capital/labor ratios are
Consistent with:
A)Latvia being a capitalabundant country.
B)Latvia being a laborabundant country.
C)Latvia being neither a capital nor laborabundant country.
D)Latvia being both a labor and capitalabundant country.

Question

Reference: Ref 4­9
(Table: Factor Use in Latvian Trade) According to the
Heckscher­Ohlin model, Latvia's capital/labor ratios are
Consistent with:
A)Latvia being a capital­abundant country. 
B)Latvia being a labor­abundant country. 
C)Latvia being neither a capital­ nor labor­abundant country. 
D)Latvia being both a labor­ and capital­abundant country.

Quizplus · Accepted Answer

According to the Heckscher-Ohlin model, a country is considered capital-abundant if it has a higher capital/labor ratio compared to other countries, and labor-abundant if it has a lower capital/labor ratio. Looking at the table, Latvia has a relatively low capital/labor ratio, indicating that it is a labor-abundant country. Therefore, the best choice is B.

Reference: Ref 4­9 (Table: Factor Use in Latvian Trade) According to the

Reference: Ref 49 (Table: Factor Use in Latvian Trade) According to the