A. Describe the main reasons for trade according to the Heckscher-Ohlin model. B. Suppose the U.S....

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A. Describe the main reasons for trade according to the Heckscher-Ohlin model. B. Suppose the U.S. produces cloth and technology. The U.S. is abundant in capital and Thailand is abundant in labor. Cloth is the labor-intensive industry while technology is capital-intensive industry. Describe the pattern of trade between U.S. and Thailand according to the Heckscher-Ohlin model. What happens to the relative price of technology in the two countries after trade according to the Heckscher- Ohlin model? C. Given the pattern of trade established in part B, suppose that the U.S. experiences export-biased growth. Describe and show in a PPF what that means for the U.S. economy. Explain what happens to U.S. terms of trade because of this biased growth. D. Given the pattern of trade established in part B, suppose that the U.S. experiences import-biased growth. Describe and show in a PPF what that means for the U.S. economy. Explain what happens to U.S. terms of trade because of this biased growth. E. Looking at the table below, are those patterns of trade consistent with the H-O model? Explain why or why not. Capital per million dollars Labor (person-years) per million dollars Capital-labor ratio (dollars per worker) Average years of education per worker Proportion of engineers and scientists in work force Imports $2.132,000 119 $17,916 9.9 0.0180 Exports $1,876,000 131 $14,321 10.1 0.0255 A. Describe the main reasons for trade according to the Heckscher-Ohlin model. B. Suppose the U.S. produces cloth and technology. The U.S. is abundant in capital and Thailand is abundant in labor. Cloth is the labor-intensive industry while technology is capital-intensive industry. Describe the pattern of trade between U.S. and Thailand according to the Heckscher-Ohlin model. What happens to the relative price of technology in the two countries after trade according to the Heckscher- Ohlin model? C. Given the pattern of trade established in part B, suppose that the U.S. experiences export-biased growth. Describe and show in a PPF what that means for the U.S. economy. Explain what happens to U.S. terms of trade because of this biased growth. D. Given the pattern of trade established in part B, suppose that the U.S. experiences import-biased growth. Describe and show in a PPF what that means for the U.S. economy. Explain what happens to U.S. terms of trade because of this biased growth. E. Looking at the table below, are those patterns of trade consistent with the H-O model? Explain why or why not. Capital per million dollars Labor (person-years) per million dollars Capital-labor ratio (dollars per worker) Average years of education per worker Proportion of engineers and scientists in work force Imports $2.132,000 119 $17,916 9.9 0.0180 Exports $1,876,000 131 $14,321 10.1 0.0255

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A The main rea sons for trad e ac cordin g to the H eck sche rO hli n mo d el ar e diff e r e n c es in fa ctor e n d o wments an d comp arat ive adva... View the full answer