Multiple Choice
Canada has 5,000 labor units and 2,500 capital units, while Mexico has 500 labor units and 200 capital units. The production of a car requires 200 labor units and 300 capital units. The production of a guitar requires 10 labor units and 12 capital units. According to the Heckscher-Ohlin Theorem:
A) Canada will export both cars and guitars to Mexico.
B) Canada will import both cars and guitars from Mexico.
C) Canada will export cars to Mexico and import guitars from Mexico.
D) Canada will export guitars to Mexico and import cars from Mexico.
Correct Answer:
Verified
Correct Answer:
Verified
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