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1. In the Specific Factors Model RD-RS diagram analyze the effect of following shock on pM/pF . The domestic economy is land abundant, the foreign

1. In the Specific Factors Model RD-RS diagram analyze the effect of following shock on pM/pF . The domestic economy is land abundant, the foreign economy capital abundant, F is the land specific good and M the capital specific good. Let M be manufactured goods and F food. a. Assume land can be devoted to housing or agriculture and population increases. b. For the shock in (a) explain in a sentence the effect on quantity of M imported by the domestic economy.

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