Exercise 19.32. (1) Prove Proposition 19.16. (2) Explain why when = 1, specialization in the sector

Exercise 19.32. (1) Prove Proposition 19.16. (2) Explain why when ε = 1, specialization in the sector without learning-by-doing does not have an adverse effect on the relative income of the South. (3) What are the implications of trade opening on relative incomes if ε < 1? (4) Characterize the equilibrium if all economies are closed until time t = T and then open to international trade at time T. What are the implications of this result for infant industry protection.