Answered: Y Y A A' X X Nation 1 Nation 2

Business

Economics

Y Y A A' X X Nation 1 Nation 2

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

a.) Looking at these graphs, suppose that the good 'X' is labour-intensive, while 'Y' is capital-intensive. Which nation is relatively more capital abundant? Why?

b.) What is likely to happen to wages in the capital abundant nation when it trades with other nations?

c.) Will the outcome of the above question change if capital was immobile in the nation?

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Parts a and b in the attached image please
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