According to the Rybczynski theorem, immigration will cause:
A) an increase in the output of the labor-intensive good and a decrease in the output of the capital-intensive good in the receiving country.
B) an increase in the output of both the labor-intensive and the capital-intensive goods in the receiving country.
C) a decrease in the output of the labor-intensive good and an increase in the output of the capital-intensive good in the receiving country.
D) a decrease in the output of both the labor-intensive and the capital-intensive good in the receiving country.

Question

Quizplus · Accepted Answer

The Rybczynski theorem states that an increase in one factor of production (in this case labor due to immigration) in a specific sector will cause an increase in the output of that sector and a decrease in the output of the other sector that uses the other factor of production (in this case, capital). Therefore, choice A is the most accurate answer.

According to the Rybczynski Theorem, Immigration Will Cause