What is the name given to the idea that, in a Heckscher-Ohlin model, labor immigration increases output for the labor-intensive industry while reducing output in the capital-intensive industry?
A) Stolper-Samuelson theorem
B) specific-factors model
C) Ricardian model
D) Rybczynski theorem

Question

Quizplus · Accepted Answer

This is known as the Rybczynski theorem, which states that an increase in the endowment of a factor will lead to an increase in the production of the good that uses that factor intensively and a decrease in the production of the other good. In this case, an increase in labor will increase output in the labor-intensive industry and decrease output in the capital-intensive industry, leading to a shift in the economy's production possibility frontier. The other options are not relevant to this phenomenon.

What Is the Name Given to the Idea That, in a Heckscher-Ohlin