Suppose two countries, Canada and Mexico, produce two goods, timber and televisions. Assume that land is specific

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Suppose two countries, Canada and Mexico, produce two goods, timber and televisions. Assume that land is specific to timber, capital is specific to televisions, and labor is free to move between the two industries. When Canada and Mexico engage in free trade, the relative price of televisions falls in Canada and the relative price of timber falls in Mexico. Show graphically and explain how the wage changes in Canada because of a fall in the price of televisions, holding constant the price of timber.

Posted Date: Jun 25, 2024 08:33 AM

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Suppose two countries, Canada and Mexico, produce two goods, timber and televisions. Assume that land is specific

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