Question: f) Under free trade, how would a 15% increase in India's productivity in both sectors affect world prices and the real wage in the US

f) Under free trade, how would a 15% increase in India's productivity in both sectors affect world prices and the real wage in the US and India? Explain. (a specific answer is required; use the demand curves from part (e) to nd the new equilibrium relative price of shoes. Hint: start again by assuming that each country completely specializes. Is complete specialization still an equilibrium? Explain)

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