Due to the current Covid19 crisis, the tourism industry worldwide is hit hard, as consumers are less willing to travel abroad and spend their vacations in foreign countries with high levels of Covid19 cases. This has led to a fall in the world's relative price of tourism services. You are asked to consider the effects of this for Indonesia. For the sake of this exercise, you can treat Indonesia as a small open economy producing two pro ducts: manufacturing goods and tourism services. The manufacturing industry uses engineers and low-skilled workers to produce manufacturing goods. The tourism service industry uses beaches and low-skilled workers to produce tourism services. Engineers cannot be employed usefully in the tourism industry, and beaches are useless for the manufacturing industry. Low-skilled workers can work in both industries and can switch between them at no cost. Indonesia is abundantly endowed with low-skilled workers.

(b) (8 marks) What happens to the real wage of low-skilled workers? Illustrate your answer using a suitable diagram. Write a short explanatory text which explains how you came up with your answer.