As a general rule, the return to (or rental price of) a specific factor used in a product tends to:
A) rise disproportionally when the product is exported.
B) fall disproportionally when the product is exported.
C) benefit its owners when there is a decrease in the relative price of the product.
D) rise disproportionally when the product is imported.

Question

Quizplus · Accepted Answer

When a product is exported, the demand for that product increases on the global market. This increased demand leads to an increase in the production of the product, which in turn raises the demand for the specific factors used in its production. As a result, the return to or rental price of these factors tends to rise disproportionally.

As a General Rule, the Return to (Or Rental Price