District 12 has 2 units of labor and District 8 has 1 unit of labor. The MPL of textiles in District 12 is 5 and in District 8 is 8 units of textiles per unit of labor. The corresponding MPLs of coal are 3 and 6. Further, assume that in no trade equilibrium each district consumes 1/2 of its output of coal.
District 12 has 2 units of labor and District 8 has 1 unit of labor. The MPL of textiles in District 12 is 5 and in District 8 is 8 units of textiles per unit of labor. The corresponding MPLs of coal are 3 and 6. Further, assume that in no trade equilibrium each district consumes 1/2 of its output of coal.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter34: Globalization And Protectionism
Section: Chapter Questions
Problem 38CTQ: Show graphically that for any tariff, there is an equivalent quota that would give the same result....
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