Given the following diagram that shows the relationship between the price of good X relative to the price of good Y (PX/Py) and the wage rate relative to the return to capital or rental rate on capital (w/r), and also indicates relative factor prices in country A [(w/r)A], relative factor prices in country B [(w/r)B], relative autarky goods prices in country A [(PX/PY)A], relative autarky goods prices in country B [(PX/PY)B], and (w/r)* [where the (PX/PY) associated with (w/r)* is the highest (PX/PY) on the graph]: Px/Py (P/PY) (Px/PV) (w/p)A (w/-)* (w/5)8 w/r At (w/r) values less than (w/r)*,. and, at (w/r) values greater than (w/r)*,. good. is the relatively labor-intensive good the relatively labor-intensive

Given the following diagram that shows the relationship between the price of good X relative to the price of good Y (PX/Py) and the wage rate relative to the return to capital or rental rate on capital (w/r), and also indicates relative factor prices in country A [(w/r)A], relative factor prices in country B [(w/r)B], relative autarky goods prices in country A [(PX/PY)A], relative autarky goods prices in country B [(PX/PY)B], and (w/r)* [where the (PX/PY) associated with (w/r)* is the highest (PX/PY) on the graph]: Px/Py (P/PY) (Px/PV) (w/p)A (w/-)* (w/5)8 w/r At (w/r) values less than (w/r),. and, at (w/r) values greater than (w/r),. good. is the relatively labor-intensive good the relatively labor-intensive

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: The Supply Of And Demand For Productive Resources

Section: Chapter Questions

Problem 1CQ

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