Suppose a country with two types of workers, high skilled and low skilled, has a comparative...
Suppose a country with two types of workers, high skilled and low skilled, has a comparative advantage in biotechnology and a comparative disadvantage in shoes. Under the Stolper-Samuelson theorem, which predicts increasing inequality due to international trade, expansion of trade will result in:
| 1. |
the fall in the real wage rate of both skilled and unskilled labor |
|
| 2. |
the fall in the real wage rate of skilled and unskilled labor in the shoe industry |
|
| 3. |
the rise in the real wage rate of skilled labor and the fall of the real wage rate of unskilled labor |
|
| 4. |
the rise the real wage rate of skilled and unskilled labor in the biotechnology industry |
|
| 5. |
the rise in the real wage rate of both skilled and unskilled labor |
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