Question: Please answer and explain. Thank you. Consider the value chain model with countries, H and F. The Ws/Wy is lower in H than in F.

Please answer and explain. Thank you.

Consider the value chain model with countries, H and F. The Ws/Wy is lower in H than in F. There is a fragmentation cost T on each unit shipped across borders. Suppose that an improvement in infrastructure causes T to fall. Using the appropriate diagrams, analyze how this change effects 3. which activities are done in each country? 4. the skill premium in each country? 5. the measured productivity of firms in H

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