Assume That the United States Is Relatively Scarce in Labor

Multiple Choice

Assume that the United States is relatively scarce in labor and relatively abundant in capital.According to the Heckscher-Ohlin theory, which of the following will occur in the United States in the presence of trade?

A) The price of capital will rise and the price of labor will fall.
B) The price of capital will fall and the price of labor will rise.
C) The price of both capital and labor will fall.
D) The price of both capital and labor will rise.