If an economy experiences an increase in its labor force,everything else constant,then at constant world prices,it will

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Quizplus · Accepted Answer

When an economy experiences an increase in its labor force, it will tend to produce more of the labor-intensive good because it now has more of the resource (labor) that is relatively cheaper and more abundant. This is in line with the principle of comparative advantage, which suggests that countries (or economies) will specialize in the production of goods for which they have a lower opportunity cost. In this case, with more labor available, the economy can produce more of the labor-intensive good efficiently, while the production of the capital-intensive good might decrease or remain unchanged, as the increase in labor does not directly increase the amount of capital.

If an Economy Experiences an Increase in Its Labor Force,everything