Final-Assessment (2).pdf - Adobe Acrobat Reader DC O X File Edit View Window Help Home Tools Final-Assessment (... A Sign In 5 /7 142% 20 Share Specific Factors with Migration Search 'Bates' (30 points) Export PDF Consider two regions: Ontario and Newfoundland. Each can be thought of as its own Lo Create PDF specific factors economy. Suppose that there are two goods: Food and Cloth. Consumers in each region have identical and homothetic preferences as follows: Adobe PDF Pack Convert files to PDF and easily U = 085095. combine them with other file types with a paid subscription Assume that each region produces both goods. Each region has two specific factors-land Select File to Convert to PDF used for food (TF) and land used for cloth (To), and one mobile factor: labour (L). Denote the amount of labor used in food as LF and the amount of land used in cloth as Lo. Labour earns a nominal wage w, land in food earns a nominal return ry, and land in cloth earns a Select File nominal return ro. Production functions are identical in each region: QF = TAL$5 and Qc = 185 125. Edit PDF Comment The two regions are initially in autarky and differ as follows: Combine Files . Ontario has 4 units of land in each sector and 2 unit of labour. EUOrganize Pages . Newfoundland has 1 units of land in each sector and 2 unit of labour. Redact 1. Solve for production of food and clothing in Ontario QF, Qc. Because Ontario is in Protect autarky, this will also represent consumption of the two goods. Show your work. (10 points). Compress PDF 2. Solve for production of food and clothing in New Foundland QF, Qc. Again, this will Lu Fill & Sign also represent autarky consumption. Show your work. (10 points). Scan & OCR 3. What is the real wage of labour in each region in terms of each good. (4 points). La Send for Review 4. Now suppose that labour is allowed to move until its real wage in terms of both goods More Tools equates across regions. From which province to which province does labour migrate? (2 points). 5. For each of the four specific factors (two in each country), state whether they win or lose in terms of their overall real wage. (4 points). Create, edit and sign PDF forms & agreements Start Free Trial