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A, a small country, is considering whether to engage in the international trade. There are two products produced in A, corn and wheat. Suppose that
A, a small country, is considering whether to engage in the international trade. There are two products produced in A, corn and wheat. Suppose that the world price of corn is lower than Richland's autarky price of corn but its autarky price of wheat is lower than the world price of wheat. Assume that land is a sector-specific factor such that it can be utilized only in the production of corn, whereas labours are free to move across sectors. Do you think the landowners will support the move to free trade?
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