According to the Rybczynski theorem, how will
Immigration of unskilled labor from Mexico to the
United States affect the Mexican economy?
A)Mexico's production of capitalintensive products will increase.
B)Mexico's production of laborintensive products will decrease.
C)Wages of Mexican workers will increase.
D)Wages of Mexican workers will decrease.

Question

According to the Rybczynski theorem, how will
Immigration of unskilled labor from Mexico to the
United States affect the Mexican economy?
A)Mexico's production of capital­intensive products will increase.
B)Mexico's production of labor­intensive products will decrease.
C)Wages of Mexican workers will increase.
D)Wages of Mexican workers will decrease.

Quizplus · Accepted Answer

The Rybczynski theorem states that an increase in the endowment of a factor of production (in this case, unskilled labor) will result in an increase in the production of the good that uses that factor intensively (labor-intensive products) and a decrease in the production of the other good (capital-intensive products). Therefore, as more unskilled labor moves to the United States, Mexico's production of labor-intensive products will decrease.

According to the Rybczynski Theorem, How Will