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blushfox339Lv1
28 Sep 2019
Suppose there are two identical countries (the Banana Republic and the Apple Republic), except that they have their specific factors. Both Banana Republic and the Apple Republic have labour and capital and timber. They produce two goods: computers and furniture. Computers are produced with labour and capital and furniture are with labour and timber. Initially, both countries have the same supply of labour (100 units each), capital, and timber. Now suppose that the capital stock in the Banana Republic grows. If those two countries open up to trade, which country exports which good?
Suppose there are two identical countries (the Banana Republic and the Apple Republic), except that they have their specific factors. Both Banana Republic and the Apple Republic have labour and capital and timber. They produce two goods: computers and furniture. Computers are produced with labour and capital and furniture are with labour and timber. Initially, both countries have the same supply of labour (100 units each), capital, and timber. Now suppose that the capital stock in the Banana Republic grows. If those two countries open up to trade, which country exports which good?
Nusrat FatimaLv10
28 Sep 2019
