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There are two countries, China and Belgium, two factors of production, land T, and labor L, and two goods, cloth and wheat. The production functions,
There are two countries, China and Belgium, two factors of production, land T, and labor L, and two goods, cloth and wheat. The production functions, which are identical across countries, are: Qc = L1/2 c T1/2 c Qw = L1/5 w T4/5 w Here, Li is the amount of labor used in industry i, Ti is the amount of land used in industry i, and Qi is the amount of good i produced. China has 1 billion people and 9, 600, 000 square kilometers of land. Belgium has 355 habitants per square kilometer
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