Answer the question(s)below based on the following diagram of a country that is in international trade equilibrium.

-Refer to the figure above.If this country is labor abundant,then according to the HO theory good X should be ________ intensive.
A)capital
B)labor
C)both capital and labor
D)Can't tell without more information

Question

Answer the question(s)below based on the following diagram of a country that is in international trade equilibrium.
 
-Refer to the figure above.If this country is labor abundant,then according to the HO theory good X should be ________ intensive.
A)capital 
B)labor 
C)both capital and labor 
D)Can't tell without more information

Quizplus · Accepted Answer

According to the HO theory, a labor-abundant country should specialize in goods that require a relatively greater amount of labor, making good X labor-intensive. Therefore, the answer is B - labor.

Answer the Question(s)below Based on the Following Diagram of a Country