Solved

Suppose Portugal Has 700 Workers and 26,000 Units of

Question 132

Multiple Choice

Suppose Portugal has 700 workers and 26,000 units of
Capital, and France has 18,000 workers and 700 units of
Capital.Technology is identical in both countries.Assume
That wine is the capital­intensive good and cloth is the
Labor­intensive good.Which of the following statements is
CORRECT if the nations start trading with each other?


A) Wages will increase in Portugal.
B) Rental rates in France will increase.
C) Wages in France will decrease.
D) Rental rates in Portugal will increase.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q76: The PPF of a country will be

Q123: Which of the following statements is CORRECT?<br>A)The

Q125: Leontief discovered a "paradox" in his test

Q126: Leontief's study of U.S.post­World War II trade

Q127: Malaysia is relatively abundant in labor, whereas

Q128: Wages generally:<br>A)are higher in labor­abundant countries than

Q129: What was "paradoxical" about Leontief's test of

Q130: The international equilibrium price (or world price)

Q131: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB7261/.jpg" alt=" (Table: Capital Intensity

Q133: According to the Heckscher­Ohlin model, international<br>Trade for