International Economics English Edition Eighth Edition Chapter Exercises Chapter 4International Economics 8e Krugman Chapter 4 Resources Comparative Advantage and Income Distribution1 In the 2-factor

roduction of Good A requires a high amount of land and a low amount of labor, while the production of Good B requires a high amount of labor and a low amount of land. If Good A is land-intensive, then it must have a high rental cost per unit of labor. Conversely, if Good B is labor-intensive, then it must have a low wage cost per unit of land. Thus, the two goods cannot both be intensive in both land and labor, as that would violate the relative intensities of the factors of production.