2. Suppose that a labor-abundant country and a land-abundant country both produce labor- and land-intensive goods with
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2. Suppose that a labor-abundant country and a land-abundant country both produce labor- and land-intensive goods with the same technology. Drawing on the analysis in Chapter 4, first analyze the conditions under which trade between the two countries eliminates the incentive for labor to migrate. Then, using the analysis in Chapter 5, show that a tariff by one country will create an incentive for labor migration.
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International Economics Theory And Policy
ISBN: 9780321116399
6th Edition
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
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