If P_{LA} / P_{KA} < P_{LB} / P_{KB} where P_{LA} is price of labour in country A and P_{LB} in country…
Country A has the lower labour-to-capital price ratio. Under the relative-factor-price definition, this makes A labour-abundant relative to B.
Choose your answer
If P_{LA} / P_{KA} < P_{LB} / P_{KB}
where P_{LA} is price of labour in country A and P_{LB} in country B. And P_{KA} price of capital in country A and P_{KB} in country B.
Answer and explanation
Correct answer A
Country A has the lower labour-to-capital price ratio. Under the relative-factor-price definition, this makes A labour-abundant relative to B.
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RPSC School Lecturer (Sanskrit Education)