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Computers Are Relatively Capital Intensive in Their Production, While Wool

Question 16

Multiple Choice

Computers are relatively capital intensive in their production, while wool is relatively labor intensive. Australia is relatively capital abundant and New Zealand is relatively labor abundant. According to the Heckscher-Ohlin theorem:


A) we would expect Australia to export computers to New Zealand and import wool from New Zealand.
B) we would expect Australia to export both computers and wool to New Zealand.
C) we would expect Australia to import both computers and wool from New Zealand.
D) we would expect Australia to import computers from New Zealand and export wool to New Zealand.

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