Please answer fast... Assume that Home can produce two goods,apples and bananas. The unit labor requirementin apple production is 4, while it is 2 in bananaproduction. Foreign's unit labor requirement forapples is 8 and it is 2 for bananas. Assume thatwhen these countries trade, Home specializes inapples, Foreign specializes in bananas and theworld relative price of applesPA2.PBa. If these countries trade, which country willhave a higher wage? Why is this the case?b. Using a numerical example for prices, showhow wages are derived in each country whenthey trade with each other.

The division of labour is the separation of the responsibilities in any financial gadget or…

a. If these countries trade, which country will have a higher wage? Why is this the case? b. Using a numerical example for prices, show how wages are derived in each country when they trade with each other.

a. If these countries trade, which country will have a higher wage? Why is this the case? b. Using a numerical example for prices, show how wages are derived in each country when they trade with each other.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter21: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

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