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thank you, answer needed This is a continuation of the previous question. Consider a multi-good Ricardian model with two countries, Home and Foreign. Their unit

thank you, answer needed

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This is a continuation of the previous question. Consider a multi-good Ricardian model with two countries, Home and Foreign. Their unit labor requirements are given by: has if yc Good Unit labor requirement at Home Unit labor requirement in Foreign Is th (hours/unit) (hours/unit) use A 1 1.5 ort t B 1 3 ntag C 4 4 try th D 4 0.5 try sh b. Now, suppose that transportation costs are introduced into this framework, which are 80% of production costs. Which of the goods that Foreign was importing from Home in part a. will now become non-traded? Explain your answer. (1+4= 5 points) c. The equilibrium relative wage ratio w/w* = 1 in part a. is obtained from the intersection of the relative demand for Home labor (relative to Foreign) and the relative supply for Home labor (relative to Foreign). The relative demand curve for Home to Foreign labor has both downward sloping sections as well as horizontal sections (see figure 3.5 in your textbook for an example). Explain intuitively what results in the horizontal sections of the relative demand curve for Home to Foreign labor. (2 points)

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