Question: a) Consider an offshoring model in which: - Home's skilled labour has a lower relative wage than Foreign's skilled labour, and - the costs of

a) Consider an offshoring model in which:

- Home's skilled labour has a lower relative wage than Foreign's skilled labour, and

- the costs of capital and trade are equal cross production activities.

With trade via offshoring, what will happen to the relative wage of high-skilled labour in both countries? Explain.

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