b

Trade and Resources: The Heckscher-Ohlin Model - Work It Out 4 Suppose there are drastic technological improvements in shoe production in Home such that shoe factories can operate almost completely with computer-aided machines. Consider these data for the Home country. Computers Sales revenue = PcQc = 100 Payments to labor = WLc = 50 Payments to capital = RKc = 50 Percentage increase in the price = 42 = 0% Shoes Sales revenue = PsQs = 100 Payments to labor = WLs = 10 Payments to capital = RKs = 90 Percentage increase in the price = 4* = 40% d. gains in real terms, and loses These results consistent with the Stolper-Samuelson theorem