Heckscher Model 1)2 countries, 2 goods, 2 factors of production. 2)Technology: same in both countries.
Suppose we have two countries, A, and B, and two factors of production, labor and capital. Thecountry endowment is:Labor CapitalCountry A 3090Country B 6015Suppose good C is capital-intensive and good S is labor-intensive.1. Which country will export C in trade? (5pts)2. In country A, the production of which good decreases after trade? (5pts)3. In country B, is the relative price of C higher or lower under trade, as compared to au-tarky? (5pts)4. According to the Stopler-Samuelson theorem, do you think the workers in country A willsupport free trade policy? (5pts)