France produces agricultural products and manufactured products, using both labour and capital. When France engages in free trade, it starts exporting manufactured products, which is capital intensive. In the long run, which one of the following scenarios is incorrect?
France produces agricultural products and manufactured products, using both labour and capital. When France engages in free trade, it starts exporting manufactured products, which is capital intensive. In the long run, which one of the following scenarios is incorrect?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![France produces agricultural products and manufactured products,
using both labour and capital. When France engages in free trade, it
starts exporting manufactured products, which is capital intensive.
In the long run, which one of the following scenarios is incorrect?
O France remains capital abundant.
O Allocation of French capital changes compared to autarky.
O Real rental in the manufacturing industry increases more than the real rental
in the agricultural industry.
O Real wage in France falls.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcca31329-ec54-42d3-a2c8-7bca24f8b719%2Fd529ef53-3e5d-4f58-8feb-214ec62dde0e%2F2o3wx0v_processed.jpeg&w=3840&q=75)
Transcribed Image Text:France produces agricultural products and manufactured products,
using both labour and capital. When France engages in free trade, it
starts exporting manufactured products, which is capital intensive.
In the long run, which one of the following scenarios is incorrect?
O France remains capital abundant.
O Allocation of French capital changes compared to autarky.
O Real rental in the manufacturing industry increases more than the real rental
in the agricultural industry.
O Real wage in France falls.
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