The Rybczynski Theorem Asserts That in a Two-Good Model, and Assuming

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

A) an equal increase in the output of both goods.
B) an increase in the output of the good that uses the growing factor intensively and a decrease in the output of the other good.
C) an increase in the output of both goods but a relatively greater increase in the output of the good that uses the growing factor intensively.
D) an increase in the output of the good that uses the growing factor intensively, but the output level of the other good will remain unchanged.

Correct Answer:

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