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Questions › JNU › JNU SIS 2014 › Q23
4 marks, −1International Economics › Theories of international trade › The Rybczynski theorem, specific factors and immiserising growthModerateabout 1 min

JNU SIS 2014 Question 23: Theories of international trade

If an economy produces two goods, XXX and YYY, with two factors of production, KKK and LLL, where XXX is labour-intensive good and YYY is capital-intensive good and if the factor intensities of production of the goods are different at any factor price range and are nonreversible, then under the assumption of constant returns to scale, an increase in the supply of labour at constant commodity prices gives rise to

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If an economy produces two goods, X and Y, with two factors of production, K and L, where X is labour-intensive good and Y is capital-intensive good and if the factor intensities of production of the goods are different at any factor price range and are nonreversible, then under the assumption of constant returns to scale, an increase in the supply of labour at constant commodity prices gives rise to (A) an absolute increase in the production of X and an absolute decrease in the production of Y (B) an absolute increase in the production of both X and Y (C) an absolute increase in the production of Y and an absolute decrease in the production of X (D) an equiproportionate increase in the production of X and Y

Theories of international trade has come up 151 times in 6 exams since 2006.

What this question tests

This question is on The Rybczynski theorem, specific factors and immiserising growth, part of Theories of international trade in International Economics.

Other results on how factor growth and factor mobility shape output and welfare.

TestStop has 8 past-paper questions on this subtopic.

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