If Unskilled Labor Is Relatively Plentiful and Cheap in Many

question 419

Multiple Choice

If unskilled labor is relatively plentiful and cheap in many foreign countries, then as the United States expands its trade with these foreign countries, the domestic demand for

• A)both skilled and unskilled labor will rise proportionately.
• B)skilled labor will fall and the demand for unskilled labor will rise.
• C)skilled labor will rise and the demand for unskilled labor will fall.
• D)both skilled and unskilled labor will be unaffected, assuming no barriers to free trade.

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Definitions:

Fixed Proportion

A production scenario where inputs are used in rigid, unchanging ratios to produce outputs.

Crew Members

Individuals who work together as part of a team, especially on ships, aircraft, or in film and television productions.

Aircraft

A vehicle designed to navigate through the air.

Returns to Scale

The change in output resulting from a proportional change in all inputs (factors of production) in the long run.