Suppose That We Are in a Two-Factor, Two-Country World Where

Multiple Choice

Suppose that we are in a two-factor, two-country world where the factors of production Are labor (L) and land (T) , the returns to the factors are the wage rate (w) and the rental Rate on land (t) , and the countries are country A and country B. In this situation, country A is land-abundant relative to country B by the physical definition of relative factor Abundance if __________, and country A is land-abundant relative to country B by the Price (or economic) definition if __________.

A) (L/T) _A < (L/T) _B; (w/t) _A > (w/t) _B
B) (L/T) _A < (L/T) _B; (w/t) _A < (w/t) _B
C) (L/T) _A > (L/T) _B; (w/t) _A > (w/t) _B
D) (L/T) _A > (L/T) _B; (w/t) _A < (w/t)