Which Theory Considers the Income Distribution Effects of Trade in the Short

question 130

Multiple Choice

Which theory considers the income distribution effects of trade in the short run?

• A) specific-factors theory
• B) product life cycle theory
• C) factor-endowment theory
• D) Stolper-Samuelson theorem

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Definitions:

Price Elastic

Refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Demand Schedules

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices over a given period.

Price Elasticity

The degree to which consumer demand for a product reacts to shifts in its price, showcasing the level of consumer sensitivity to pricing alterations.

Long Run

A period in which all inputs, including physical capital and labor, can be fully adjusted, allowing for analysis of equilibrium and efficiency without the constraints of fixed factors.