# Suppose that country A has 9,000 worker hours available for production and that it initially has the

## Question:

Suppose that country A has 9,000 worker hours available for production and that it initially has the technology given by case 3 of Exercise 1. Derive its PPF and determine its exact dimensions.

**data from case 3 of exercise 1**

Now, suppose that scientists in A develop a technology that doubles labor productivity in both industries. What would happen to A’s PPF? Derive and explain. What would happen to the pattern of comparative advantage? Derive and explain.

**Data from in exercise 1 1. **

For each of the following cases below determine the following:

**(a)** the pretrade relative prices;

**(b)** the direction of comparative advantage; and

**(c)** the limits to the relative wage rate.

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