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This is a computational question on unilateral tariffs imposed by a small country. In this question we use the specific-factors model of trade to better
This is a computational question on unilateral tariffs imposed by a small country. In this question we use the specific-factors model of trade to better understand the positive and normative effects of a unilateral tariff. We focus on a small country, Country H. There are two final goods, good A and good B; it should come as no surprise that good A is amplifiers and good B is bananas. There are three factors of production, high-skilled labour (S) which is used only in production of amplifiers, low-skilled labour (L) which is used only in production of bananas, and general purpose labour (G) which is used in both industries. The technologies for producing the goods in H are given by
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