![Mcqmate logo](https://mcqmate.com/images/logos/logo-black.png)
![Mcqmate logo](https://mcqmate.com/images/logos/logo-white.png)
McqMate
Q. |
Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land. Note that wages are the returns to labor and rents are the returns to land. According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B. |
A. | Wages and rents should fall in Country A |
B. | Wages and rents should rise in Country A |
C. | Wages should rise and rents should fall in Country A |
D. | Wages should fall and rents should rise in Country A |
Answer» C. Wages should rise and rents should fall in Country A |
View all MCQs in
International EconomicsNo comments yet