According to the Two-Sector (Manufacturing and Agriculture) Specific-Factor Model, Will

question 90

Short Answer

According to the two-sector (manufacturing and agriculture) specific-factor model, will returns to capital and land rise, fall, or not change when a country with a comparative advantage in agricultural output moves from an autarkic to a free trade situation?

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Monopolizing

The practice of gaining exclusive control over a commodity or service in a particular market, limiting competition.

Alcoholic Drink

A beverage containing ethanol, commonly known as alcohol, which has psychoactive effects.

Sales Presentation

The actual presentation of the sales message to the prospect.