According to the Rybczynski theorem, how will
Immigration affect the sending country's production of
Laborintensive and capitalintensive goods?
A)Production of the laborintensive goods will increase and production of capitalintensive goods will decrease.
B)Production of both laborintensive and the capital intensive goods will increase.
C)Production of laborintensive goods will decrease and production of capitalintensive goods will increase.
D)Production of both laborintensive and capital intensive goods will decrease.

Question

According to the Rybczynski theorem, how will
Immigration affect the sending country's production of
Labor­intensive and capital­intensive goods?
A)Production of the labor­intensive goods will increase and production of capital­intensive goods will decrease.
B)Production of both labor­intensive and the capital­ intensive goods will increase.
C)Production of labor­intensive goods will decrease and production of capital­intensive goods will increase.
D)Production of both labor­intensive and capital­ intensive goods will decrease.

Quizplus · Accepted Answer

According to the Rybczynski theorem, immigration will affect the sending country's production by increasing the availability of labor, which will lead to an increase in the production of capital-intensive goods and a decrease in the production of labor-intensive goods. This is because the increase in labor supply will lower the cost of capital and increase the cost of labor, making capital-intensive goods relatively cheaper to produce and labor-intensive goods relatively more expensive. Therefore, production of capital-intensive goods will increase while production of labor-intensive goods will decrease.

According to the Rybczynski Theorem, How Will