Now suppose that the cost of offshoring falls, such that: logtL = 3 (c) Which intermediates are now offshored to Foreign and which are produced in Home? (d) What is the cost of producing the nal good, log P? How does this compare to your answer to part (b)? Now suppose that wages can change in reSponse to the fall in the cost of offshoring. (e) How would you expect the relative wage of skilled vs. unskilled workers to change in Home and Foreign? Explain your