Consider the specific factors model. There are two countries (Home and Foreign), two industries (Manufacturing and Agriculture) and three factors (labour, land, and capital.) Assume that home has comparative advantage in agriculture. Using a figure, show the impact of trade on earnings of labour, capital and land. Who will be in favour of trade and who will be against it?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider the specific factors model. There are two countries (Home and Foreign), two industries (Manufacturing and Agriculture) and three factors (labour, land, and capital.) Assume that home has comparative advantage in agriculture. Using a figure, show the impact of trade on earnings of labour, capital and land. Who will be in favour of trade and who will be against it?

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