Homework Answers
Answer is option D)
Specific factors model
The specific factor in the export sector benefits from free trade.bcoz when country is exposed to trade, then the price of good (which it exports), rises, that in turn benefits the factor that is specific in the production of that good ,
Thus the owners of capital are better off & owners of land are worse off
Thus option a & b are wrong
Now MP of land will fall, bcoz wages of land owners are related to MAP of land , so if MP falls, they are worse off
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