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Suppose there are two countries, H and F. Each country has two households and all households have the same preferences. Household 1 in each country
Suppose there are two countries, H and F. Each country has two households and all households have the same preferences. Household 1 in each country owns low-skilled labour and Household 2 in each country owns high-skilled labour. The ratio of the supply of high-skilled labour to low-skilled labour equals 0.8 in Country H and equals 2.0 in Country F. In the absence of transfers across households, which households will gain when these two countries move from autarky to trade
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