5. Using a diagram similar to Figure 4-12, show the effect of a decrease in the relative price of computers in Foreign. What happens to the wage relative to the rental? Is there an increase Computers: Sales revenue = PCQC = 100 Payments to labor = WLC = 50 Payments to capital = RKC = 50 Percentage increase in the price = ΔPC/PC = 0%

Shoes: Sales revenue = PSQS = 100 Payments to labor = WLS = 5 Payments to capital = RKS = 95 Percentage increase in the price = ΔPS/PS = 50%

in the labor–capital ratio in each industry?

Explain.