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Q. After technological change has taken place in each nation, the following table now applies in the absence of specialization and trade. Northland East shore Combined Product Workers Output Modems 50 50 50 150 200DVD drives 50 100 50 75 175
a) Which country now has an absolute advantage in producing modems? DVD drives?
b) Which country now has a comparative advantage in producing modems? DVD drives?
c) Abstracting from any other factors, what is the range for rates of exchange of modems for DVD drives that will now include Northland and East shore to trade modems and DVD drives? If trade occurs, which country currently exports modems and imports DVD drives?
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