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It is assumed that there exist five different goods production and a1, a2 ,..., a5 and a*,a*,...,a* represent the unit labor requirement of domestic and
It is assumed that there exist five different goods production and a1, a2 ,..., a5 and a*,a*,...,a* represent the unit labor requirement of domestic and foreign countriesinrespective,andleta,a,...,a =1,5,3,6,12; a*,a*,...,a*=10,40,12, 125 125 12, 9. If the ratio of domestic and foreign wage is 3, please answer the following question. (Need to calculate) (a) Pleas explain the comparative advantage and absolute advantage by the logic of unit labor requirement. (b) Please explain which goods home country will import. (c) (optional) If there exist 100% transport costs, please explain how many goods belong to non-traded goods for domestic country
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