Using the HO Model,assume That the United States Is Capital

question 13

Multiple Choice

Using the HO model,assume that the United States is capital abundant and Mexico is labor abundant.If soybeans are capital intensive and avocados are labor intensive,

• A)Mexico will produce more soybeans once trade is introduced.
• B)the United States will produce more avocados once trade is introduced.
• C)avocado prices in the United States will fall once trade begins.
• D)soybean prices in Mexico will rise once trade begins.

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