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Two countries are producing two goods: one perfectly tradable t, the other non-tradable nt. For each good i =t,nt and ea
Posted: Mon Mar 21, 2022 4:28 pm
by answerhappygod
- Two Countries Are Producing Two Goods One Perfectly Tradable T The Other Non Tradable Nt For Each Good I T Nt And Ea 1 (84.95 KiB) Viewed 33 times
Two countries are producing two goods: one perfectly tradable t, the other non-tradable nt. For each good i =t,nt and each country j=1,2, the production function is linear and labor = = is the only input Y =AL = (2) Workers can freely choose to work in any sector in their home country, but cannot move to another country. Assume that A; = Ane = 1, AŽ = 4, and Ape = 3. Then which country AZ = = nt nt would have higher price for the tradable good? and which would have higher price for the non-tradable good?