Question
1a. There are three countries, the US, China, and Europe. It takes 2 workers to produce one unit of nontradables in the US, 8 workers
1a. There are three countries, the US, China, and Europe. It takes 2 workers to produce one unit of nontradables in the US, 8 workers in China and 4 workers in Europe. The price of nontradables is 1.0 in the US, 2.0 in China and 4.0 in Europe. What is the wage rate in the US?
1b. What is the wage rate in China?
1c. What is the wage rate in Europe?
1d. Suppose the number of workers required to produce one unit of nontradables falls to one in the US. What is the US wage rate now?
1e. Given your answer to 1d (above), what is the price of nontradables in the US now.
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Microeconomics Principles For A Changing World
Authors: Eric Chiang
4th Edition
1464186677, 978-1464186677
