Labor intensive-both produce under constant returns to scale

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Suppose that in our economy represented by sectors A and T as described in class (A is capital intensive and T is labor intensive; both produce under constant returns to scale), there is a positive production externality (for instance knowledge spillover) associated with the production of sector T. There is no such externality in sector A. Use graphs and reasoning to derive and illustrate both the production possibility frontier for this economy and the autarkic (or no trade) equilibrium in that economy. Explain as carefully as you can your

Reference no: EM13853225

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