Respuesta :
Answer:
E. the relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.
Explanation:
Heckscher-Ohlin International Trade theory states that : a country should export the good which uses its abundant resource intensively, & import the good which uses its its scarce resource intensively.
Example : If country 1 is capital abundant, it should export capita intensive good C. And, it should import labour intensive good L from capital abundant country 2.
Implication : Capital abundant (rich) country has low price of capital intensive good, Capital scarce (poor) country has high price of capital intensive good. This provides the rationale of above specialisation export - import benefit
- Export of capital intensive good from capital abundant (capital rich) country decreases their domestic supply. This increases their price in exporting country.
- Import of these goods in capital scarce (capital poor) country increases supply in imported markets. So, it decreases their price in importing country. Â
This happens till relative price of the capital-intensive good in the capital-rich country will be the same as that in the capital-poor country.