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Country a Has a Large Pool of Skilled Workers Earning

Question 27

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Country A has a large pool of skilled workers earning $50 per hour and a small pool of unskilled workers earning $18 per hour. Country B has a small pool of skilled workers earning $60 per hour and a large pool of unskilled workers earning $8 per hour. Trade theory predicts that if A and B engage in international trade with each other,


A) real wages paid to skilled workers will fall in A
B) unskilled wages will become more unequal between A and B
C) real incomes will become more equal within B
D) the wages of unskilled workers in B will fall
E) wages to all workers in both countries will rise

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