Consider the following resource constraints and land and capital input requirements in the Australiaand Japan in the production of dairy and soya:

Dairy

Soya

Australia

Japan

Land

3

5

1,000

1,000

Capital

2

1

3,000

4,000

Given each country's resource constraints, which of the following correctly states the effect of trade on the returns to the factors of production (land and capital) according to the Stolper-Samuelson theorem?

Select one:

returns to capital in dairy production will rise in Australia

returns to capital in dairy production will fall in Australia

returns to capital in dairy production will fall in Japan

returns to land owners in soya production will rise in Japan

returns to land owners in soya production will fall in Australia