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The Rybczynski theorem asserts that in a two-good model, assuming that product prices stay constant, growth in the endowment of one factor of production with the other factor remaining unchanged, will result in __________.

User Aspyct
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The Rybczynski theorem asserts that in a two-good model, assuming that product prices stay constant, growth in the endowment of one factor of production with the other factor remaining unchanged, will result in- An increase in the output of the good that uses the growing factor intensively and a decrease in the output of the other good.

Step-by-step explanation:

  • Rybczynski theorem states that there exist a positive/direct relationship between changes in a factor endowment and changes in the output of the product that uses that factor intensively.
  • The theorem also states that there is a negative/indirect relationship between changes in a factor endowment and changes in the output of the product that does not use that factor

User IllegalPigeon
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