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I have the solution to this question but do not understand how one gets to the answer. Please help me in that regard. Thank you
I have the solution to this question but do not understand how one gets to the answer. Please help me in that regard. Thank you
4. Given the following resource constraints and capital and labour input requirements in UK and France in the production of a unit of clothing and plastic. Given each country's resource constraints, which of the following correctly states the effect of trade on the returns to the factors of production (capital and labour) according to the Stolper-Samuelson theorem the returns to ___________
Clothing Plastic UK France
Capital 2 3 2400 3000
Labour 2 1 1200 2000
a) labourers in clothing production will rise in the UK
b) labourers in clothing production will rise in France
c) labourers in clothing production will fall in France
d) capital owners in plastic production will fall in the UK
e) capital owners in plastic production will rise in France
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