Question
You are in a Heckscher-Ohlin world. That is, all assumptions of the Heckscher-Ohlin (or factor-proportions) model hold.In order to produce 100 berries, a business needs
You are in a Heckscher-Ohlin world. That is, all assumptions of the Heckscher-Ohlin (or factor-proportions) model hold.In order to produce 100 berries, a business needs one person and one machine. That is, L(subscript B) = M (subscript B).In order to make a computer a business needs one person and four machines. That is, M(subscript C) = 4L(subscript C).Bangladesh has a total work force of L = 2000 and machine inventory of M = 5000.Pakistan has a total workforce of L = 3200 and machine stock of M = 5000.
Part A) How many workers will be hired in the Bangladesh computer industry and how many will be hired in the Bangladesh berry industry?
Part B) How many workers will be hired in the Pakistan computer industry and how many will be hired in the Pakistan berry industry?
NO IMAGE UPLOAD SHOW CALCULATION
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