In the same applecomputer trade example given in Section 19.5, suppose that because of technology transfer, the

Question:

In the same apple–computer trade example given in Section 19.5, suppose that because of technology transfer, the South becomes just as productive as the North at producing apples: one unit of southern labor can now produce 160 apples instead of 100.
(a) Autarky: Redo Table 19.3 to reflect this change. Assume the other parameter values are unchanged.
(b) Free trade: Do the same thing for Table 19.4.
(c) Discuss the differences: How do the gains from trade change? Who benefits from the improvement in technology in the South?