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Quiz Specific Factors

Quiz Specific Factors - ECN 436 International Trade Theory...

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Unformatted text preview: ECN 436: International Trade Theory Professor Manjira Datta Assignment 3: The Specific Factors Model This is a 20—minute quiz. Total points: 20 Computers are produced using capital and labor, while wheat is produced using land and labor. Labor freely moves between these two sectors of production in the United States! However, the marginal product of labor is constant in computer production while it is diminishing in wheat production. (8 points) Determine how labor is allocated between computer and wheat production in the US. Explain cleariy on a properly iabeled graph. \ 1 : gag-MS, ‘ 0:34 L. 0N result of trade? Explain. \ . Q It :2) VWLJR :9 “teem“ “AH”; “W (I. (6 points) How is the U. 8. income distribution affected if the price of wheat increases due to trade? Explain. ...
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