Suppose Country 1 is a large country in the world and exports footwear and imports machine, where footwear is labor intensive and machine is capital intensive. Suppose that Country 1 attracts a lot of inward FDI. That is, the capital endowments in Country 1 increases. Draw the PPF curve and the offer curve to show what happen to Country l's terms of trade(TOT) and welfare. Please use the graphs with machine in the x-axis and footwear in the y-axis.

Suppose Country 1 is a large country in the world and exports footwear and imports machine, where footwear is labor intensive and machine is capital intensive. Suppose that Country 1 attracts a lot of inward FDI. That is, the capital endowments in Country 1 increases. Draw the PPF curve and the offer curve to show what happen to Country l's terms of trade(TOT) and welfare. Please use the graphs with machine in the x-axis and footwear in the y-axis.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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