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The Factor Proportions Theory Predicts That When Country A, Which

Question 8

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The factor proportions theory predicts that when country A, which as a relative factor abundance of unskilled workers, begins to engage in international trade with country B, which as a relative factor abundance of skilled workers,


A) unskilled workers in country A will perceive that they will begin to gain ground (in terms of wage incomes) relative to skilled workers in country A.
B) skilled workers in country B will perceive that they will begin to gain ground (in terms of wage incomes) relative to unskilled workers in country B.
C) relative wages of skilled workers in the two countries will diverge.
D) relative wages of unskilled workers in the two countries will converge.

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