Question #2.

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.

Please Provide Explanations.