Assume that the United States is relatively scarce in unskilled labor and relatively abundant in capital.According to the Stolper- Samuelson theorem, free trade policies would tend to be opposed by ______ in the United States.
A) unskilled workers
B) owners of capital
C) both unskilled workers and owners of capital
D) neither unskilled workers nor owners of capital

Question

Quizplus · Accepted Answer

According to the Stolper- Samuelson theorem, trade policies that increase trade between countries with different factor endowments will tend to benefit the abundant factor of production and harm the scarce factor. Since the United States is relatively abundant in capital and relatively scarce in unskilled labor, free trade policies would tend to harm unskilled workers in the United States. Therefore, unskilled workers would tend to oppose free trade policies.

Assume That the United States Is Relatively Scarce in Unskilled