answer the following and please explain if possible !+ where do i exactly put the new production (green line) on the graph. if needed.Thank youNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. LABOR-INTENSIVE GOODS1098760132100 12A+3 4 5 6 7CAPITAL-INTENSIVE GOODS8Once trade begins, the price of labor in Tomczakistan910A-New Production(?). In Leightvania, the price of laborstays the samedecreasesincreases 4. Factor-price equalizationThe fictional country of Tomczakistan is a nation that is relatively rich in labor resources. It can produce two types of goods, capital-intensive goodsand labor-intensive goods. Tomczakistan's production possibilities frontier (PPF) is shown on the following graph.Currently, Tomczakistan is closed to international trade and producing at the grey point (star symbol) labeled A on the graph. Suppose thatTomczakistan is going to trade with Leightvania, a country that is relatively rich in capital and was also previously closed to international trade.On the following graph, use the green point (triangle symbol) to indicate which way Tomczakistan will adjust its production by placing it on one ofthe two black points (plus symbol). Dashed droplines will automatically extend to both axes.

Production possibility frontier shows different combination of two good or services that can be…

LABOR-INTENSIVE GOODS 10 9 8 1 0 0 1 2 3 4 7 CAPITAL-INTENSIVE GOODS 5 6 8 Once trade begins, the price of labor in Tomczakistan 9 10 New Production In Leightvania, the price of labor stays the same decreases increases

LABOR-INTENSIVE GOODS 10 9 8 1 0 0 1 2 3 4 7 CAPITAL-INTENSIVE GOODS 5 6 8 Once trade begins, the price of labor in Tomczakistan 9 10 New Production In Leightvania, the price of labor stays the same decreases increases

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter18: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

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