In the 2- factor,2- good Heckscher- Ohlin model,an influx of workers from across the border would
A)shift the production possibility curve outward and decrease the production of the capital- intensive product.
B)shift the production possibility curve outward and decrease the production of the labor- intensive product.
C)shift the production possibility curve outward,and increase the production of both goods.
D)move the point of production along the production possibility curve.
E)shift the possibility curve outward and displace preexisting labor.

Question

Quizplus · Accepted Answer

An influx of workers increases the labor supply, shifting the production possibility curve outward. In the Heckscher-Ohlin model, this would lead to an increase in the production of the labor-intensive product and a decrease in the production of the capital-intensive product.

In the 2- Factor,2- Good Heckscher- Ohlin Model,an Influx of Workers