Multiple Choice
Consider two products: automobiles and shoes. If shoes are labor intensive and automobiles are capital intensive, what can we expect in free-trade conditions?
A) The relative price of automobiles in the auto-exporting country will decrease.
B) The relative price of shoes in the shoe-exporting country will increase.
C) The capital-abundant country will produce more shoes.
D) The labor-abundant country will produce more automobiles.
Correct Answer:
Verified
Correct Answer:
Verified
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