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With a shift from no trade to free trade, if Country X is relatively labor-abundant and relatively land-scarce and Country Y is relatively labor-scarce and
With a shift from no trade to free trade, if Country X is relatively labor-abundant and relatively land-scarce and Country Y is relatively labor-scarce and relatively land-abundant, the factor-price equalization theorem predicts that :14:46 Multiple Choice OK O rents will rise in Country X and fall in Country Y until they equalize. O wages will increase in Country Y but will remain unchanged in Country X. O rents will fall in Country Y but will remain unchanged in Country X. O wages will rise in Country X and fall in Country Y until they equalize
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