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International Trade Computers: Sales revenue =Pc Qc=100$ Payments to labor=W-Lc=40 $ Payments to capital =R.Kc=60 $ Shoes: Sales revenue =P3 0= =100$ Payments to labor

International Trade

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Computers: Sales revenue =Pc Qc=100$ Payments to labor=W-Lc=40 $ Payments to capital =R.Kc=60 $ Shoes: Sales revenue =P3 0= =100$ Payments to labor =W.L$=70 $ Payments to capital =R. K= =30 $ Suppose that the price of shoes P. rises by 10%, whereas the price of computers P. does not change at all. Calculate the percentage change of wage and rental on capital in the two (computers and shoes) industries, and discuss the changes in real wage and real rental on capital in the two industries

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