Question
22 Turkey is a small open economy (price- taker in world export/import markets) with two factors of production: labor and land. Recently Turkey has experienced
22
Turkey is a small open economy (price- taker in world export/import markets) with two factors of production: labor and land. Recently Turkey has experienced "brain drain", which refers to emigration of high- skilled labor out of Turkey and into the European Union or the USA. Turkey's two main industries are electronics, which is high-skilled-labor-intensive, and tourism, which relies on its natural resources, i.e. coastal access. In the HO model, examine the impact on Turkey due to emigration. (b) What happens to high-skilled worker wages and rental rates of coastal land? Explain.
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