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2. Two goods, Boots (B) and Forestry products (F) are produced in a country. The production of Boots uses Labour (L) and Capital (K). Capital

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2. Two goods, Boots (B) and Forestry products (F) are produced in a country. The production of Boots uses Labour (L) and Capital (K). Capital is a specic factor and the stock of Capital is xed at KB = 10. The production of Forestry products uses Labour (L) and Land (T). Land is a specic factor and the stock of Capital is xed at T F = 8. Production functions for the goods are as follows: L23 B = K 2L B( B 10) L2 F = nahf} Labour is mobile between the two industries. The total amount of labour is 1} = 10. L B + LF = E

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