(Solved): Assume a two-country two-good two-input model where the following relationships hold: \( (\mathrm{K ...

Assume a two-country two-good two-input model where the following relationships hold: \( (\mathrm{K} / \mathrm{L})_{\text {U.S. }}>(\mathrm{K} / \mathrm{L})_{\mathrm{RoW}} \) \( (\mathrm{K} / \mathrm{L})_{\text {automobiles }}>(\mathrm{K} / \mathrm{L})_{\text {shoes }} \) Where \( (\mathrm{K} / \mathrm{L})_{\text {U.S. }} \) is the capital-labor ratio in the United States, \( (\mathrm{K} / \mathrm{L})_{\mathrm{R} \text { ow }} \) is the capital-labor ratio in the Rest of the World, \( (\mathrm{K} / \mathrm{L})_{\text {automobile }} \) indicates the capital-labor ratio in the production of automobiles, and \( (\mathrm{K} / \mathrm{L})_{\text {shoes }} \) indicates the capital-labor ratio in the production of shoes. Assume further that technology and tastes are the same in the United States and the Rest of the World. The relationships shown in here indicate that the United States has a comparative advantage in the production of while the Rest of the World has a comparative advantage in the production of automobiles; shoes shoes; automobiles neither shoes nor automobiles; both of the goods both the goods; neither shoes nor automobiles