Which of the following statements about the specific
Factors model is TRUE?
A)When exports of a product rise, the increase in export revenue is divided equally among mobile and
Specific factors of production.
B)When imports rise, revenues of firms that compete with imports fall.The decrease in revenue is divided
Equally among the mobile and specific factors of
Production.
C)When exports of a product rise, factors specific to exports gain less and mobile factors gain more; when
Imports rise, factors specific to firms competing with
Imports gain more and mobile factors gain less.
D)When exports of a product rise, factors specific to When exports of a product rise, factors specific to
Exports gain more than mobile factors; when imports
Rise, factors specific to import competing industries lose
More than mobile factors.

Question

Which of the following statements about the specific­
Factors model is TRUE?
A)When exports of a product rise, the increase in export revenue is divided equally among mobile and
Specific factors of production.
B)When imports rise, revenues of firms that compete with imports fall.The decrease in revenue is divided
Equally among the mobile and specific factors of
Production.
C)When exports of a product rise, factors specific to exports gain less and mobile factors gain more; when
Imports rise, factors specific to firms competing with
Imports gain more and mobile factors gain less.
D)When exports of a product rise, factors specific to When exports of a product rise, factors specific to
Exports gain more than mobile factors; when imports
Rise, factors specific to import competing industries lose
More than mobile factors.

Quizplus · Accepted Answer

In the specific-factors model, factors specific to an industry (like capital or land) are more affected by changes in trade than mobile factors (like labor). When exports rise, specific factors in the export industry gain more, and when imports rise, specific factors in import-competing industries lose more.

Which of the Following Statements About the Specific­

Which of the Following Statements About the Specific