Suppose that labor is mobile between sectors but that
Capital and land are specific.Then labor will tend to
Benefit from trade when:
A)it spends a large amount of its income on the imported good.
B)it spends a large amount of its income on the exported good.
C)wages do not change much in percentage terms.
D)all of these occur.

Question

Quizplus · Accepted Answer

When labor spends a large amount of its income on the imported good, it benefits from trade because trade typically lowers the price of imported goods, increasing the purchasing power of labor's income.

Suppose That Labor Is Mobile Between Sectors but That