In the Specific Factors Model, a 5% Decrease in the Price

In the specific factors model, a 5% decrease in the price of food accompanied by a 5% decrease in the price of cloth will cause ________ in the welfare of labor, ________ in the welfare of the fixed factor in the production of food, and ________ in the welfare of the fixed factor in the production of cloth.

A) an increase; an increase; an increase
B) a decrease; a decrease; a decrease
C) no change; no change; no change
D) a decrease; an increase; an increase
E) an increase; a decrease; a decrease

Correct Answer:

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