Homework Assignment on Chapter 4: Heckscher-Ohlin Model

Minami Seki Soon Park

Edgeworth Box Diagram

Labor used in food production LF
Increasing

OF
Increasing

Land used in food production

Land used in cloth production

TC 1 F LC

C
TF

Increasing

OC

Increasing

Labor used in cloth production

Labor Force Decrease

Labor used in food production L1
F

L2

Increasing
F

OF

Land used in food production

Land used in cloth production

T2

C2 T2F
Increasing

Increasing

C1 1

T1C O2c

T1F

O1c
Increasing

1 Labor used in cloth production L C

L2 C

Output of Food, QF

PPF

Q2F

Q1F

Slope= PC/PF TT1 TT2

Q2C Q1C

Output of Cloth, QC

Budget Constraint Consumption of food, D

F

Output of food, QF Budget constraint (slope= -PC/PF) Q1F

PPF Q1C Consumption of cloth, DC Output of Cloth, QC