Suppose that Brazil is capital abundant and Chile is natural resource abundant.If timber is natural resource intensive and computers are capital intensive,then according to the Heckscher-Ohlin Theorem,Chile should export goods that
A)intensively use labor input.
B)intensively use capital input.
C)intensively use natural resources.
D)use capital and labor in about equal proportions.

Question

Quizplus · Accepted Answer

According to the Heckscher-Ohlin Theorem, a country should export goods that intensively use its abundant factor of production. Since Chile is natural resource abundant, it should export goods that intensively use natural resources, which in this case is timber. Therefore, the correct choice is C, which states that Chile should export goods that intensively use natural resources.

Suppose That Brazil Is Capital Abundant and Chile Is Natural