Unskilled labor is a relatively scarce factor of production in the United States. a. Explain carefully the
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Question:
a. Explain carefully the meaning of the above statement. In particular, what does the word “relatively” refer to? Hint: You may find it helpful to write an algebraic inequality in your answer.
b. Given the above statement, what does the Stolper-Samuelson theorem imply about how trade will affect unskilled U.S. workers? Explain.
c. Do you believe that unskilled workers are best analyzed in the context of the Heckscher-Ohlin (Stolper-Samuelson) framework, or in the context of the specific factors model? Explain your position.
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