πŸ“Š International Economics
Q. Countries H and F operate in an H-O world. Each country produces two goods, A and B. Good A is relatively capital intensive and country F is relatively labor abundant. Suppose however, that the production technology is not the same in the two countries. That is, H has a superior technology of production compared to F.
  • (A) Free trade will equalize wages between the two countries
  • (B) In free trade, there will be no incentive for migration of labor from H to F.
  • (C) In free trade there will be some incentive for workers from F to migrate to H.
  • (D) Both b. and c.
πŸ’¬ Discuss
βœ… Correct Answer: (D) Both b. and c.

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