4. In the text we examined the impacts of increases in the supply of capital and land....

Question:

4. In the text we examined the impacts of increases in the supply of capital and land.

But what if the mobile factor, labor, increases in supply?

a. Analyze the qualitative effects of an increase in the supply of labor in the specific factors model, holding the prices of both goods constant.

b. Graph the effect on the equilibrium for the numerical example in problems 2 and 3, given a relative price of 1, when the labor force expands from 100 to 140.

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Related Book For  book-img-for-question

International Economics Theory And Policy

ISBN: 9780321116399

6th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz

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