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Distinguish among land-, labor-, and capital-intensive goods, citing an example of each without resorting to book examples. How do these distinctions relate to international trade? How do distinctive products, unrelated to resource intensity, relate to international trade?

Respuesta :

Answer:

Land intensive goods generally refer to raw materials (minerals, oil, etc.), agricultural products or fishing products, i.e. commodities. Labor intensive goods require a lot of skilled or semi-skilled labor, e.g. clothing. Capital intensive goods require a lot of machinery and equipment, e.g. technological products, cars, airplanes.

International trade is based on comparative advantages, because countries that have abundant supplies of any factor of production will produce goods that take advantage of them. An abundance of factors of production lowers their relative costs. For example, Japan has an abundance of labor and capital, so it manufactures industrial and high tech goods, but it has to import food and raw materials.

Distinctive products that are associated with high quality can provide an advantage for the exporting country, for example Germany exports good cars, Argentina exports good meat, France exports good wines, etc.

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