Mexico is relatively abundant in labor,while Canada is relatively abundant in capital.In both nations,the production of televisions is relatively more capital intensive than the production of corn.According to the factor endowment theory,Mexico will have a(n):

Question

Quizplus · Accepted Answer

According to the factor endowment theory, countries should specialize in and export goods that they can produce at a lower opportunity cost than other countries. Mexico's relative abundance in labor makes the production of corn relatively labor-intensive, giving them a comparative advantage in the production of corn. While Mexico also produces computers, the capital-intensive nature of this industry means that Canada, which is relatively abundant in capital, may have a comparative advantage in this industry. Therefore, choice C is the correct answer.

Mexico Is Relatively Abundant in Labor,while Canada Is Relatively Abundant