The country of Pugelovia has an endowment (total supply) of 20 units of labor and 3 units of capital, whereas The Rest of the world has 80 units of labor and 7 units of capital. Use the ratios of labor to capital and/or capital to labor in both countries to determine whether Pugelovia is labor-abundant or capital abundant. If car production is capital-intensive and cloth is labor-intensive, what is the Heckscher-Ohlin prediction for the pattern of trade between Pugelovia and The Rest of the world?
Pugelovia Rest of the world
Quanity of units of available Labor 20 80
Qantity of of units of available Capital 3 7