Question #2. (Answer d - l please as they all correlate with each other)

Assume that there are two economies (Washington and California), two goods (apples and iPods), and two factors (land and labor). The return to land T is the rental rate r and the return to labor L is the wage rate w. Washington is land-abundant, while California is labor-abundant. Apple production is land-intensive, while iPod production is labor-intensive. Let the relative price of apples be p = Papple / Pipod.