Consider a world in which there are two countries, Guatrarica and Costamala, which share an open border such that labor flows freely between the two countries. Total income (GDP) in each country is equal to the sum of wages and rents to capital owners that accrue from production as in Figure 7-2. Explain the impact on the two countries from a technology shock that increases the marginal product of labor in Costamala:

a. The number of workers in each country.

b. Wages in each country.

c. GDP in each country.

d. Capital rents in each country.