The factor-price equalization theorem implies that laborers will end up earning the same wage rate in all countries only if the laborers are allowed to migrate between countries.

Question

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The factor-price equalization theorem suggests that under certain conditions (such as identical production technologies and free trade of goods, but without the need for labor mobility between countries), the prices of factors of production (like wages for labor) will equalize across countries. This occurs through the mechanism of international trade, not through labor migration.

The Factor-Price Equalization Theorem Implies That Laborers Will End Up