Using the specific factors model,assume that strawberry production requires the specific factor of land,tractor production requires the specific factor of capital,and labor is variable.If the United States is capital abundant compared to Mexico,and Mexico is land abundant compared to the United States,then in the short run with trade we would expect
A)the income of U.S. land owners to increase.
B)the income of U.S. workers to increase.
C)the income of Mexican workers to increase.
D)the income of Mexican land owners to increase.

Question

Quizplus · Accepted Answer

In the short run with trade, Mexico, being land abundant, will specialize in strawberry production, which uses land as a specific factor. This will increase the demand for land in Mexico, raising the income of Mexican landowners.

Using the Specific Factors Model,assume That Strawberry Production Requires the Specific