
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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please help me with 1 and 2. Thank you

Transcribed Image Text:Question 1
Look at the table below.
Physical
Capital
Researchers Skilled
Unskilled GDP
Labor
Labor
USA
25
26
27
2
China
10
17
8
18
Japan
12
11
5.8
2
226
20
15
India
4
3
6
30
5
Germany 8
6
3
1
4.5
In the table above each number represents a country's share in the world endowment of a factor
production or GDP. For example, number 25 in the row for USA and the column for Physical
Capital says that the US owns 25% of the world endowment of physical capital. Based on these
numbers and your knowledge of the Heckscher-Ohlin model, answer the following questions.
a) Which countries should be exporting the services of Physical capital?
b) Which countries should be importing the services of Researchers?
c) Which countries should be exporting the services of skilled labor?
d) Which countries should be exporting the services of unskilled labor?
Question 2 k
According to the Heckscher-Ohlin model with 2 goods and 2 factors (capital and labor), the
movement of Mexican migrants to the US would increase the production of the labor-intensive
goods in the US. True or False? Which theorem would you use to answer this question? Suppose
the US is a closed economy. What should be the impact of this migration on the relative price of
the labor-intensive good? What should happen to the relative and real reward of labor in the US?
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