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According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored
According to the Feenstra-Hanson model of offshoring, if Japan is skilled-labour abundant and Mexico is unskilled-labour abundant, once the most unskilled-labour intensive task is offshored from Japan to Mexico, the skilled-unskilled wage ratio will:
(a) Decrease in both countries.
(b) Increase in Japan but decrease in Mexico.
(c) Decrease in Japan but in increase in Mexico.
(d) Increase in both countries.
Explain your answer clearly.
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