QUESTION 1 The Stolper-Samuelson theorem would predict that trade between the United States, a capital-abundant country, and Mexico, a labor-abundant country, should lead to: O a. Lower wages in both countries O b. Higher wages in Mexico. O c. Higher wages in both countries. O d. Lower wages in Mexico. QUESTION 2 Which of the following factors tends not to mitigate the effects of the Stolper-Samuelson theorem: O a. Inter-industry trade. O b. Intra-industry trade. O c. Technological improvements. O d. All of the above. QUESTION 3 Which of the following is not true about trade? O a. Trade will cause expansion in the export-oriented sector. O b. Trade will cause contraction in the import-competing sector. O c. Trade occurs because of similarities in the availability of factor inputs across countries and differences in the proportions of those factors that are used in producing different products. O d. They are all true statements