Economics · International Trade Theories
Consider the following statements regarding the Stolper-Samuelson Theorem: 1. The theorem posits that the imposition of trade protection, such as tariffs, raises the return to the scarce factor of production and lowers the return to the abundant factor. 2. In a labour-abundant country, a tariff on imports is expected to raise wages and reduce the returns to capital. 3. According to the theorem, free international trade leads to a rise in the real wages of workers in a capital-abundant country where labour is the scarce factor. Which of the statements given above is/are correct? Select the correct answer using the code given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 3
- 21 and 2 only✓
- 32 and 3 only
- 41 and 3 only
Correct answer
1 and 2 only
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