Suppose when Russia opens to trade, it imports automobiles, a capital-intensive good.
a. According to the Heckscher-Ohlin theorem, is Russia capital-abundant or labor-abundant? Briefly explain.
b. What is the impact of opening trade on the real wage in Russia?
c. What is the impact of opening trade on the real rental on capital?
d. Which group (capital owner or labor) would support policies to limit free trade? Briefly explain.