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[6 points] Consider the Ricardian model with two economies (Mexico and the U.S.A.) and two commodities (goods and

services). The marginal products of labor for each commodity are as follows: Services Goods Mexico │ MPL*S = 1/4 MPL*G = 1/2 U.S.A. │ MPLS = 1 MPLG = 1 Assume the two economies are closed and prices of Services are: pS = $2, and p*S = 12 pesos. (a) Calculate the autarky price of Goods in both countries: pG, and p*G. (b) Calculate wages in both industries in both countries: WG, W*G, WS, and W*S.

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