In a Two-Country World, If Country a Is the Relatively

question 30

Multiple Choice

In a two-country world, if country A is the relatively labor-abundant and country B is the relatively capital-abundant country by the "price" definition of factor abundance (and where w is the wage rate and r is the return to capital) , then __________. When the countries move from autarky to Heckscher-Ohlin-type trade, the result will be that __________.

• A) (w/r)_A < (w/r)_B; (w/r)_A will rise and (w/r)_B will fall
• B) (w/r)_A < (w/r)_B; (w/r)_A will fall and (w/r)_B will rise
• C) (w/r)_A > (w/r)_B; (w/r)_A will rise and (w/r)_B will fall
• D) (w/r)_A > (w/r)_B; (w/r)_A will fall and (w/r)_B will rise

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Definitions:

Accurate

The quality of being correct, precise, or exact in measurement, decision, or representation.

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Visual perceptions that differ from reality, created by discrepancies in the brain's processing of visual information.

Hypnotized

The state of being under a form of psychological suggestion or trance, often used for therapeutic purposes.

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A professional association for physicians in the United States aimed at promoting the art and science of medicine and the betterment of public health.