Country Alpha has 15 thousand acres of land and 45 thousand laborers, whereas Country Beta has 100 thousand acres of land and 200 thousand laborers. These countries produce a labor-intensive good A, and a land-intensive good B. Based on the information given, we can conclude that:

If trade opens up between Country Alpha and Country Beta, according to the Heckscher-Ohlin model, Country Beta will export and import .
a. both the goods; neither good
b. good B; good A
c. good A; good B
d. neither good; both of the goods

b. good B; good A

Explanation:

According to the Heckscher-Ohlin model, a country should export the good that is has a relative abundance in and import the good it has relative scarcity in.

Find out labor to land ratio of both countries:

Country Alpha = 45 / 15 = 3

Country Beta = 200 / 100 = 2

Country Alpha has 3 labor units per acre

Country Beta has 2 labor units per acre

Country Alpha therefore has more labor abundance and should export the labor intensive good which is good A which means Country B will import A.

Country Beta should export more land intensive good which is good B.

answer; /// that is so (false);

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