The Stopler-Samuelson theorem states that with international trade the:
A) scarce factor receives a larger piece of the economic pie and the abundant factor tends to receive a smaller piece.
B) larger factor receives a larger piece of the economic pie and the smaller factor tends to receive a smaller piece.
C) smaller factor receives a larger piece of the economic pie and the larger factor tends to receive a smaller piece.
D) abundant factor receives a larger piece of the economic pie and the scarce factor tends to receive a smaller piece.
E) factor prices do not change.

Question

Quizplus · Accepted Answer

The Stolper-Samuelson theorem posits that in international trade, the factor of production that a country has in abundance will gain, while the factor that is scarce in comparison will lose, in relative terms. This means that the returns to the abundant factor increase, while those to the scarce factor decrease.

The Stopler-Samuelson Theorem States That with International Trade The