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Mexico Has 2,000 Units of Capital and 2,000 Workers

Question 61

Multiple Choice

Mexico has 2,000 units of capital and 2,000 workers. The United States has 6,000 units of capital and 4,000 workers. Clothing production is labor intensive and chemical production is capital intensive. Suppose that the United States eliminates all restrictions on immigration from Mexico. How many Mexican workers must immigrate to the United States in order for factor price equalization to occur?


A) 500
B) 1,000
C) 1,500
D) 2,000

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