Finland is capital abundant relative to potential trading partners in the rest of the world. Telecommunications...
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Finland is capital abundant relative to potential trading partners in the rest of the world. Telecommunications is a capital intensive industry relative to the business services industry. Businesses in Finland have made investments in both industries, creating stocks of capital that are devoted to either telecommunications or business services. a) Suppose that Finland is not trading. Draw the specific factors diagram for Finland, indicating how labor is divided between the two industries, and showing the prevailing wage w. b) Modify your diagram to show how Finland's labor allocation and wage change when it opens trade with the rest of the world. Finland is capital abundant relative to potential trading partners in the rest of the world. Telecommunications is a capital intensive industry relative to the business services industry. Businesses in Finland have made investments in both industries, creating stocks of capital that are devoted to either telecommunications or business services. a) Suppose that Finland is not trading. Draw the specific factors diagram for Finland, indicating how labor is divided between the two industries, and showing the prevailing wage w. b) Modify your diagram to show how Finland's labor allocation and wage change when it opens trade with the rest of the world.
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Specific Factors Diagram for Finland Assumptions Finland is abundant in capital K compared to its potential trading partners Telecommunications T is a ... View the full answer
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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