When a country's labor market is in equilibrium in the specific factors model,the wage rate
A)will be higher in the sector where product price is lower.
B)will be higher in the sector where product price is higher.
C)will be the same in both sectors.
D)will be higher in the export- competing sector.
E)will be higher in the import- competing sector.

Question

Quizplus · Accepted Answer

In the specific factors model, labor is mobile between sectors, leading to an equalization of the wage rate across sectors when the labor market is in equilibrium.

When a Country's Labor Market Is in Equilibrium in the Specific