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Suppose that in the absence of transportation costs Home specializes in coffee and coal while Foreign specializes in cars and com. Cigars are produced

 

Suppose that in the absence of transportation costs Home specializes in coffee and coal while Foreign specializes in cars and com. Cigars are produced in both countries and are thus al nontraded good. From the data in the accompanying table it can be deduced that Home's relative wage (w/w) is (Enter your response as an integer) If both coal and cars become nontraded goods after transportation costs are included in the analysis, it must be the case that those costs, as a percentage of production costs, are at least Good Coffee Coal Cigars Cars Com Relative Home Productivity Advantage (ala) 8 6 2 0.67 0.2

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