(Solution) - Suppose that the United States and Canada have the factor -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Suppose that the United States and Canada have the factor endowments given in the table in Question 1. Suppose further that the production requirements for a unit of steel is 2 machines and 8 workers, and the requirement for a unit of bread is 1 machine and 8 workers.
a. Which good, bread or steel, is relatively capital-intensive? Labor-intensive? Explain your answer.
b. Which country would export bread? Why?