In the long run (the Heckscher-Ohlin model), immigration will lead to:
A) an increase in the production of both the labor-intensive and the capital-intensive goods in the receiving country.
B) an increase in the production of the labor-intensive good and a decrease in the production of the capital-intensive good in the receiving country.
C) a decrease in the production of both the labor-intensive and the capital-intensive goods in the receiving country.
D) a decrease in the production of the labor-intensive and an increase in the production of the capital-intensive good in the receiving country.

Question

Quizplus · Accepted Answer

According to the Heckscher-Ohlin model, immigration results in an increase in the supply of labor in the receiving country, leading to a shift towards the production of the labor-intensive good. This shift is due to the comparative advantage of the receiving country in the production of the labor-intensive good. As a result, the production of the capital-intensive good will decrease. Therefore, the correct answer is B.

In the Long Run (The Heckscher-Ohlin Model), Immigration Will Lead