Question
If we assume computer (C) is the capital-intensive goods, and shoes (S) is the labor- intensive goods. After the free trade, the relative price of
If we assume computer (C) is the capital-intensive goods, and shoes (S) is the labor-
intensive goods. After the free trade, the relative price of computer to shoes drops
in Home country (Pc). If we assume the price of shoes do not change(Ps= 0).PsPs
What will happen to the wage for the home labors (W)? What about the rentalsW
on the capitalRfor the home capital owners? Could you lay out the inequalityR
betweenR,W,Pcand 0?R W Pc
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Probability And Statistical Inference
Authors: Robert V. Hogg, Elliot Tanis, Dale Zimmerman
9th Edition
321923278, 978-0321923271
