Which good will each country export? Briefly explain why.

d. In the trade equilibrium, what is the real wage in Home in terms of cars and in terms of TVs? How do these values compare with the real wage in terms of either good in the no-trade equilibrium?

e. In the trade equilibrium, what is the real wage in Foreign in terms of TVs and in terms of cars? How do these values compare with the real wage in terms of either good in the no-trade equilibrium?

f. In the trade equilibrium, do Foreign’s workers earn more or less than Home’s workers, measured in terms of their ability to purchase goods? Explain why.

LO.1