Suppose country produces two goods from two inputs

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Suppose a country produces two goods (wheat and cars) from two inputs (labor and capital). Suppose further that we observe that workers and capitalists in the car industry oppose freer trade in the short run but only workers oppose freer trade in the long run. Using the HO model, the Stolper-Samuelson theorem and the specific factors model discussed in class, what can we infer about the factory intensities of wheat and cars in this case? What can we infer about the factor abundance of labor and capital? Be sure to explain your answers.

Reference no: EM131242401

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