In the Long Run, When Factors Are Mobile, an Increase

question 45

Multiple Choice

In the long run, when factors are mobile, an increase in the relative price of a good will increase the real earnings of the factor used intensively in the production of that good. This is known as:

• A) the Heckscher-Ohlin model.
• B) the Stolper-Samuelson theorem.
• C) the Ricardian model.
• D) the specific-factor theorem.