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Suppose that we are within Heckscher-Ohlin model with perfect competition. There are two goods (computers and shoes), and two factors of production: Skilled labor (H)

Suppose that we are within Heckscher-Ohlin model with perfect competition. There are two goods (computers and shoes), and two factors of production: Skilled labor (H) and unskilled labor (L). The country has 100 skilled workers and 200 unskilled workers. Each factor is mobile across industries. The production function in the computer industry is given by: YC = LC 1/4 HC The production function in the shoe industry is given by: YS = LS 1/2 HS 3/4. 1/2. Denote by s the wage of skilled workers and by w the wage of unskilled workers

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