Review_ch5 - 2 Explain the adjustments to factor prices as a result of factor mobility within each domestic economy 3 Explain the long run effects

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Econ 306 Chapter 5 review questions Base you answers on the example developed in chapter 5 – the US exports wheat, wheat being land- intensive; the rest of the world exports cloth, cloth being labour intensive. 1. Explain the short-run effects of opening trade on the following: Workers in wheat production in the US Workers in cloth production in the US Workers in cloth production in the rest of the world Workers in wheat production in the rest of the world Landlords in wheat production in the US Landlords in cloth production in the US Landlords in cloth production in the rest of the world Landlords in wheat production in the rest of the world
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Unformatted text preview: 2. Explain the adjustments to factor prices as a result of factor mobility within each domestic economy. 3. Explain the long run effects from opening trade on the following: Workers in the US Workers in the rest of the world Landlords in the US Landlords in the rest of the world 4. True-false-uncertain. Explain. The factor of production used more intensively in the imported product stands to gain more from opening trade. In the long run factor prices in different sectors of the domestic economy tend to equalize as a result of factor mobility....
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Review_ch5 - 2 Explain the adjustments to factor prices as a result of factor mobility within each domestic economy 3 Explain the long run effects

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