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2012-10-07
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Question 1....

within a two-country model with two goods produced by one factor, a1=2, a2=1,L=80, a1*=1, a2*=1, L*= 100, and C2/C1=C2*/C1*=1; where a1 and a2 denote the fixed quantities of labor input per unit of output for goods 1 and 2, respectively , in the home country;  L stands for the total endowment of labor at home;  C1 and C2 represent the quantities demanded ( in fixed proportion) of goods 1 and 2, respectively in the home country;  and asterisks indicate the corresponding variables in the foreign country.  For each good, what is the direction and volume of free trade?


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2012-10-7 13:31:19
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2012-10-7 13:44:54
j9568 发表于 2012-10-7 13:31
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