Web Exercise. Factor Intensity: Measuring the intensity of how factors of production are used is not simple: multiple factors of production exist, a country's abundant factor may depend on the resources of other countries under consideration, and an intensive factor of production may depend on the industries under consideration. For example, try to calculate the labor-to-land ratio between countries. If we assume that the labor force is a constant fraction of the population, we can compare the population-to-land ratio (population density) between countries. Calculate the population-to-land ratio for the U.S., the U.K., and Australia. If the U.S. has an abundance of land in these calculations, would you predict that it is a net exporter of agricultural goods? Should it therefore also be a net importer of labor-intensive goods? Depending on the countries involved, it is hard to predict.1;

Data: For the abundance/scarcity calculations, go to the World Bank. Click "Data", select "Quick Reference," and search for "Total GDP" and "Population."

For U.S. imports and exports in agriculture, go to the International Trade Administration's site. Click on "National Trade Data" and then "Product Profiles of U.S. Merchandise Trade with a Selected Market." Select the appropriate country, then "Balance" and the appropriate display. Consider at least two categories of agricultural products.