Date of Award

Spring 2013

Document Type

Thesis

Degree Name

Bachelor of Science

Department

Economics

Abstract

In modern times, the automobile industry has become a relatively labor intensive industry as compared to other industries such as the food processing industry orIT industry. Normally, several people are involved in each process of an automobile production line. However, for a food processing firm such as a bottled water firm, it only takes a few people to control the huge machine in the factory. Under the Heckscher-Ohlin theorem’s assumption, a country will operate an industry that is intensive in its abundant resource. That means a labor abundant country will produce labor intensive goods and a capital abundant country will produce capital intensive goods. Then, why is China, a labor abundant country, not producing automobiles and exporting cars?

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