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2018-10-11
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Which of the following statements are wrong/right and why

a. Factor price equalization in different countries implies that the same    K/L ratio in an industry across countries.

b. Consider the endowment of capital and labor in two countries, A and B. K in A: 100, L in A: 50 ; K in B : 75 L in B 37.5 We know that country A will export the capital-intensive goods.

c. We've seen very high saving rates in Japan over the last 30 years. Hence, we should see a gradual shift of production into the capital-intensive sectors and out of the labor-intensive sectors.



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