Suppose when Sweetland (a hypothetical country) opens to trade, it imports computer software, a capital-intensive good.

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answerhappygod
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Suppose when Sweetland (a hypothetical country) opens to trade, it imports computer software, a capital-intensive good.

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Suppose when Sweetland (a hypothetical country) opens to trade,
it imports computer software, a capital-intensive good.
a. According to the Heckscher–Ohlin theorem, is Sweetland
capital-abundant or labor-abundant? Briefly explain. (1 mark)
b. What is the impact of opening trade on the real wage in
Sweetland? Briefly explain. (2 marks)
c. What is the impact of opening trade on the real rental on
capital? Briefly explain. (2 marks).
d. Which group (capital owner or labor) would support policies
to limit free trade? Briefly explain. (2 marks)
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