In the long run (the Heckscher-Ohlin model), immigration will lead to:
A) an increase in the wages paid to laborers in the receiving country.
B) an increase in the rent paid to capital- and land-owners in the receiving country.
C) an increase in the rent paid to capital-owners and a decrease in the rent paid to land-owners in the receiving country.
D) no change in the either the wages paid to laborers or the rent paid to capital- and land-owners in the receiving country.

Question

Quizplus · Accepted Answer

In the Heckscher-Ohlin model, in the long run, factor prices equalize due to factor mobility and adjustments in production. Immigration increases the labor supply, but in the long run, wages and rents adjust to maintain equilibrium, resulting in no change in factor prices.

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