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In the HO model, with S as the capital-intensive good, a 10% increase in the price of S could induce (a) an increase in the
In the HO model, with S as the capital-intensive good, a 10% increase in the price of S could induce
(a) an increase in the wage rate of 10%, and a fall in the rental rate.
(b) a decrease in the wage rate and an increase in the rental rate of less than 10%. (c) an increase in the rental rate of 10%, and a decrease in the wage rate.
(d) an increase in the rental rate of more than 10%, and a fall in the wage rate.
(e) None of the above.
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