Answer workers at home are paid in terms of cars

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Unformatted text preview: ions. d. In the trade equilibrium, what is the real wage at Home in terms of cars and in terms of televisions? How do these values compare with the real wage in terms of either good in the no‐trade equilibrium? Answer: Workers at Home are paid in terms of cars because Home export ECON 6032 International Trade and Foreign Direct Investment Prof. Larry Qiu cars. Home is better off with trade because its real wage in terms of televisions has increased. e. In the trade equilibrium, what is the real wage in Foreign in terms of televisions and in terms of cars? How do these values compare with the real wage in terms of either good in the no‐trade equilibrium? Answer: Workers at Foreign are paid in terms of televisions because Foreign export televisions. Foreign gains in terms of cars with trade. f. In the trade equilibrium, do Foreign workers earn more or less than those at Home, measured in terms of their ability to purchase goods? Explain why. Answer: Foreign workers earn less than workers at Home in terms of cars because Home has an absolute advantage in the production of cars. Home workers...
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This document was uploaded on 04/07/2014.

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