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Conditions of the problems There are two countries A and B Two sectors: Agriculture and manufacturing. Two products: one in agriculture and one in manufacturing.

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Conditions of the problems There are two countries A and B Two sectors: Agriculture and manufacturing. Two products: one in agriculture and one in manufacturing. Country A has the comparative advantage in the production of the agricultural product. If country A and B engage in trade, determine what happens in country A in the short run with regard to: a. Relative price of the agricultural product. (Pa / Pm) b. To the equilibrium wage in the two sectors (Draw graph) c. To the rental rates of capital and Land d. Welfare effects on the agriculture and manufacturing sector

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