Suppose that there are three factors: capital, labor, and land. Bread requires inputs of land and labor, and steel requires capital and labor. a. Which factors are variable, and which are specific? b....

Suppose that there are three factors: capital, labor, and land. Bread requires inputs of land and labor, and steel requires capital and labor.

a. Which factors are variable, and which are specific?

b. Suppose Canada’s endowments are 10 capital and 100 land and the United States’ are 50 capital and 100 land. Which good does each country export?

c. How does trade affect the returns to land, labor, and capital in the United States and in Canada?