Assume the Standard Trade Model with Two Countries (Alpha and Beta)

Multiple Choice

Assume the standard trade model with two countries (Alpha and Beta) , two goods (food and drink) , and two factors of production (land and labor) . Further assume that Alpha is relatively labor-abundant and drink is relatively labor-intensive. The pre-trade wage rate relative to land rents in Alpha is _____ the relative wage rate in Beta.

A) greater than
B) less than
C) equal to
D) double