Westland and Oceania have just started to trade with each other. Westland exports goods produced with skilled labor and imports goods made with unskilled labor from Oceania. Over time, we would expect that in Oceania the wages of unskilled workers will
A)rise, and the wages of skilled labor will fall.
B)fall, and the wages of skilled labor will rise.
C)rise, and the wages of skilled labor will rise.
D)fall, and the wages of skilled labor will fall.

Question

Quizplus · Accepted Answer

As Oceania exports goods made with unskilled labor, the demand for unskilled labor will increase, leading to a rise in their wages. Conversely, the demand for skilled labor may decrease, causing their wages to fall.

Westland and Oceania Have Just Started to Trade with Each