2. Explain the following patterns of trade using the Heckscher–Ohlin model.
France exports wine to the United States, and the United States exports movies to France.
According to the Heckscher–Ohlin model, this pattern of trade occurs because the United States has a relatively larger endowment of factors of production, such as human capital and physical capital, that are suited to the production of movies, but France has a relatively larger endowment of factors of production suited to wine-making, such as vineyards and the human capital of vintners.
Brazil exports shoes to the United States, and the United States exports shoe-making machinery to Brazil.
According to the Heckscher–Ohlin model, this pattern of trade occurs because the United States has a relatively larger endowment of factors of production, such as human and physical capital, that are suited to making machinery, but Brazil has a relatively larger endowment of factors of production suited to shoe-making, such as unskilled labor and leather.