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Suppose television production requires 20 units of labor and 4 units of land. Rice requires 1 unit of labor and 4 units of land. If

Suppose television production requires 20 units of labor and 4 units of land. Rice requires 1 unit of labor and 4 units of land.

  1. If there is no trade, which good will be relatively cheaper in each country? If a free trade occurs, what will happen with relative prices of goods?
  2. If a free trade occurs, What will happen with the factors prices? Does this happen in the real world? Explain why yes or why not.

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