Let Us Assume That Cloth-Making (Labor-Intensive) and Farming (Land-Intensive) Are

question 58

Multiple Choice

Let us assume that cloth-making (labor-intensive) and farming (land-intensive) are the only two sectors of production in a country. If this country is labor-abundant, and if trade corresponds to the Heckscher-Ohlin theory, which of the following groups will gain in the short-run, but lose in the long-run, from the opening of trade?

• A)Domestic landowners in the farming sector
• B)Domestic landowners in the cloth-making sector
• C)Foreign landowners in the farming sector
• D)Foreign workers in the cloth-making sector

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Definitions:

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Suffix

An affix that is added to the end of a word to alter its meaning or create a new word.

Combining Forms

In medical terminology, the word root with a combining form vowel (usually an “o”) that aids in making the word pronounceable, particularly when adding a suffix that begins with a consonant.

Singular

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