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f. Consider the United States after trade opens up with India. What will happen to the capital intensity of production in the capital intensive good?I
f. Consider the United States after trade opens up with India. What will happen to the capital intensity of production in the capital intensive good?I What happened to the capital intensity of production in the labor intensive good? g. Describe the changes to real returns in the United States when trade opens up. Is trade good? 2. In the trade equilibrium you analyzed above, assume immigration takes place. Specifically, suppose the labor force in the US increases by L, but the pattern of comparative advantage does not change. a. Show the new world trade equilibrium. Explain how production and consumption of both goods change. b. Show how much labor and capital usage in each industry reallocate. c. Analyze the aggregate welfare effects of immigration (ls immigration good?}
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