If Japan is relatively capital rich and the United States is relatively land rich, and if food is relatively land intensive then trade between these two, formerly autarkic countries will result in

Question

Quizplus · Accepted Answer

Since Japan is relatively capital rich, it will specialize in producing capital-intensive goods and import land-intensive goods from the United States, such as food. This will result in an increase in demand for U.S. land-intensive goods, including food, causing an increase in the relative price of food in the U.S.

If Japan Is Relatively Capital Rich and the United States