3. Assume Home has a comparative advantage in the production of good 1. When the economy opens and begins trading with Foreign, which of the following occurs? a. the relative price of good 1 increases b. industry 1 expand and industry 2 contracts c. the real wage in units of good 2 increases d. all of the above

3. Assume Home has a comparative advantage in the production of good 1. When the economy opens and begins trading with Foreign, which of the following occurs? a. the relative price of good 1 increases b. industry 1 expand and industry 2 contracts c. the real wage in units of good 2 increases d. all of the above

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter19: International Trade

Section: Chapter Questions

Problem 1.2P

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