According to the factor price equalization theorem,the ________ factor should oppose free trade policies in any given country.
A)abundant
B)scarce
C)neither
D)Can't tell without more information

Question

Quizplus · Accepted Answer

The factor price equalization theorem suggests that free trade will lead to the equalization of factor prices (such as wages for labor) between countries. This means that in a country where a particular factor (like labor or capital) is scarce, the price of that factor (e.g., wages for labor) is likely to decrease as a result of free trade, because the global equalization process will lower the high prices found in countries where the factor is scarce. Therefore, individuals or groups representing the scarce factor in any given country would likely oppose free trade policies, as these policies could negatively impact their income or return on capital.

According to the Factor Price Equalization Theorem,the ________ Factor Should