Multiple Choice
Suppose that the home country in the two-sector (manufacturing and agriculture) specific-factors model has a comparative advantage in agricultural output. What will happen to the return (rental) on capital when trade occurs?
A) It will fall.
B) It will rise.
C) It will not change.
D) It will first fall, then rise.
Correct Answer:
Verified
Correct Answer:
Verified
Q80: If trade causes some workers to be
Q81: A change in the relative price of
Q82: In the two-sector (manufacturing and agriculture) specific-factors
Q83: Suppose that land is specific to agriculture,
Q84: (Table: An Economy Before and After Trade)
Q86: Suppose that the home country in the
Q87: In the two-sector (manufacturing and agriculture) specific-factors
Q88: (Table: Revenues and Costs for Two Industries)
Q89: Suppose that a country has a comparative
Q90: According to the two-sector (manufacturing and agriculture)