Regarding international trade theorem

Reference no: EM13858587

Regarding International Trade Theorem. According to Stolper-Samuelson Theorem, if a labor rich country put a small tariff on its imports, what would happen to real wages compared to the free trade equilibrium? Is the country better off?

How should we answer this question? Since Stolper-Samuelson Theorem talks more about factor-intensive goods, and per se, it does not emphasize much about factor-abundant, should we assume H-O model hold?

Reference no: EM13858587

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