Economics · International Trade
Rybczynski theorem states that at constant relative goods prices, an increase in the endowment of one factor will lead to:
- 1A more than proportional expansion of output in both sectors
- 2A more than proportional expansion of the output in the sector which uses the other factor intensively
- 3A more than proportional expansion of the output in the sector which uses that factor intensively✓
- 4A less than proportional expansion of the output in the sector which uses that factor intensively
Correct answer
A more than proportional expansion of the output in the sector which uses that factor intensively
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