Please answer fast... Assume that Home can produce two goods,apples and bananas. The unit labor requirementin apple production is 4, while it is 2 in bananaproduction. Foreign's unit labor requirement forapples is 8 and it is 2 for bananas. Assume thatwhen these countries trade, Home specializes inapples, Foreign specializes in bananas and theworld relative price of applesPA2.PBa. If these countries trade, which country willhave a higher wage? Why is this the case?b. Using a numerical example for prices, showhow wages are derived in each country whenthey trade with each other.

The division of labour is the separation of the responsibilities in any financial gadget or…

a. If these countries trade, which country will have a higher wage? Why is this the case? b. Using a numerical example for prices, show how wages are derived in each country when they trade with each other.

a. If these countries trade, which country will have a higher wage? Why is this the case? b. Using a numerical example for prices, show how wages are derived in each country when they trade with each other.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please answer fast...

Assume that Home can produce two goods,
apples and bananas. The unit labor requirement
in apple production is 4, while it is 2 in banana
production. Foreign's unit labor requirement for
apples is 8 and it is 2 for bananas. Assume that
when these countries trade, Home specializes in
apples, Foreign specializes in bananas and the
world relative price of apples
PA
2.
PB
a. If these countries trade, which country will
have a higher wage? Why is this the case?
b. Using a numerical example for prices, show
how wages are derived in each country when
they trade with each other.

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