Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in manufactured output. What is the effect on the return of land after trade occurs?
a. The return on land increases.
b. The return on land decreases.
c. The return on land does not change.
d. The effect cannot be determined.
Answer: b. The return on land decreases.
Economics
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A) not change. B) increase, then decrease. C) increase. D) decrease.
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The difference between producer surplus and profit is always the associated with
A) opportunity costs. B) total costs. C) variable costs. D) fixed costs.
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