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A capital-abundant nation produces a capital-intensive good and a labor-intensive good. This country trades with the rest of the world. a. Graphically show the equilibrium

A capital-abundant nation produces a capital-intensive good and a labor-intensive good. This country trades with the rest of the world. a. Graphically show the equilibrium using a PPF and community indifference curve. b. Now, suppose this nation experiences neutral technological progress in the capital-intensive industry. Show this effect in the same diagram and include the new equilibrium. Assume this country is a small nation. c. Explain the effect of this growth on exports, imports, the relative price of capital-intensive good, and wellbeing in this small nation

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