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| Germany has much more capital per worker than Portugal. In autarky each country produces and consumes both machine tools and wine. Production of machine tools is relatively capital intensive whereas winemaking is labor intensive. According to the Heckscher-Ohlin model, when trade opens: A. Germany should export machine tools and Portugal should export wine. B. Germany should export wine and Portugal should export machine tools. C. Germany should produce only machine tools and Portugal should produce only wine. |