Assume a country produces only wine and cups. Both wine and cup production use land and labor as their only inputs. Wine production is relatively land-intensive while cup production is relatively labor-intensive. According to the Rybczynski theorem, a significant rise in immigration is most likely to lead to
A. an increase in wine production by a greater proportion than the increase in the production of cups.
B. an increase in the production of cups by a greater proportion than the increase in the size of the labor force due to immigration.
C. an increase in the production of both wine and cups.
D. an increase in wine production by a greater proportion than the increase in the size of the labor force due to immigration.
Answer: B
You might also like to view...
The opportunity cost of moving from point a to point b in the above figure is ________
A) zero B) 3/2 pairs of socks per sweater C) 3 pairs of socks D) 2 sweaters
In order to exercise control over the price of its product, a firm must be able to ________ competition.
A. not change B. maximize C. increase D. limit
Individuals with more experience tend to earn more than individuals with less experience. This is because
A. experience is a compensating differential. B. experience on the job increases an individual's human capital. C. the government requires that more-experienced workers be paid more than less-experienced workers. D. it is only fair that a more-experienced worker be paid more than a less-experienced worker.
Utility theory is an efficient tool in making interpersonal utility comparisons
a. True b. False Indicate whether the statement is true or false