Specific-Factor Model, see Part 1 and Part 2.

Part 1

1. {Specic Factor Modal. Chapter 3} In the \"simple\" version of the specific factor model, there are two sectors [goods], one factor [labor] that is perfectly mobile between the two sectors. and onefixed or specic factor in each sector. To be concreteI suppose the two goods are food and clothing, the specic factor in food is \"land" represented by \"T". and the specic factor in clothing is \"capital", represented by \"K\". The production functions for each sector are given by: c=s(s){sc)l1; F=H{T)IF(LJ)\"2; 3H}; mmurcecunsimint: int; :1. where C, F are the outputs of clothing and food, 11.6.11:Ir are lab-or employed in clothing and food, respectively. and \"I.\" is the total available labor avaiIahle in the economy. \"a "' and \" 21 \" are productivity factorsI so an increase in H (in El 1| represents an increase in productivity in food [clothing] production.