Economics · International Trade Theorems
The Stolper-Samuelson theorem postulates that:
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- 1A decrease in the relative price of a commodity raises the earnings of the factor used intensively in the production of that commodity.
- 2An increase in the relative price of a commodity raises the earnings of the factor used scarcely in the production of that commodity.
- 3An increase in the relative price of a commodity decreases the earnings of the factor used intensively in the production of that commodity.
- 4An increase in the relative price of a commodity raises the earnings of the factor used intensively in the production of that commodity.✓
Correct answer
An increase in the relative price of a commodity raises the earnings of the factor used intensively in the production of that commodity.
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