Suppose there are 2 countries home and foreign two factors

Reference no: EM13378988

Suppose there are 2 countries, Home and Foreign, two factors of production, capital and labor and two products, food and cloth. Home has 100 units of labor and 200 units of capital, while Foreign has 300 units of labor and 150 units of capital.

\(Q_{F}=L_{F}^{0.8}K_{F}^{0.2}\)

\(Q_{c}=L_{c}^{0.2}K_{c}^{0.8}\)

Suppose that Foreign has 3000 units of labor and 1500 units of capital (it is 10 times bigger than before). Will the change in wages that followed trade liberalization in the Home country be bigger or smaller?

Reference no: EM13378988

Questions Cloud

1calculate the annual total fixed costs for a combine that : 1calculate the annual total fixed costs for a combine that has an initial price of 300000 a useful life of 7 years a

As the mexican peso depreciates in value relative to the us : as the mexican peso depreciates in value relative to the u.s. dollar what happens to the price of u.s. goods in mexico?

Consider a country called hitech where new arrangements for : consider a country called hitech where new arrangements for making payments such as credit cards and atms have been

1the management of melchiori corporation is considering the : 1.the management of melchiori corporation is considering the purchase of a machine that would cost 520000 would last

Suppose there are 2 countries home and foreign two factors : suppose there are 2 countries home and foreign two factors of production capital and labor and two products food and

1 suppose that the economy is initially in a steady state : 1. suppose that the economy is initially in a steady state and that some of the nations capital stock is destroyed

The town of cinecity has two residents spielberg and lucas : the town of cinecity has two residents spielberg and lucas. the town currently funds its free outdoor movie projections

The new mayor has pledged to reduce air pollution and the : the new mayor has pledged to reduce air pollution and the only source of air pollution in the city are two cement

1 the difference between a perfectly competitive firm and a : 1. the difference between a perfectly competitive firm and a monopolistically competitive firm is that a

User Account

All Pages