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With no-trade, Foreign (MPLw /MPLc ) = 1, or - 1 for the slope. With trade, as the world relative price of wheat rises higher
With no-trade, Foreign (MPLw /MPLc ) = 1, or - 1 for the slope. With trade, as the world relative price of wheat rises higher than 2/3, discuss: a). Would Foreign lose more and more of its comparative advantage? b). How would the slope look like for Foreign as the world relative price of wheat keeps rising? c) What will happen to Foreign utility
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Issues in Economics Today
Authors: Robert C. Guell
8th edition
1259746399, 1259746390, 978-1259746390
