Question: Please solve on paper if there is an equation Problem 3.4. Prove that in a country with higher labor productivity in the tradable goods sector.

Please solve on paper if there is an equation

Problem 3.4. Prove that in a country with higher labor productivity in the tradable goods sector. prices and wages are higherr that is: P _ (MPLT)1_a 9P2 ' MP1,; Remember that in a given economy, the price level is P = (PT)\"(P\"T)\"". the prices of tradable goods are the same worldwide PT a 9P5. and the wages are equal in every sector in a given country. equal to the marginal value of the labor product in that sector W = P :- MPL. Moreover, for the sake of simplicity: assume that labor productivity in the non-tradable goods sector is the same at home and abroad. Typo in problem 3.4 I've noticed a small but very crucial typo in Problem 3.4. I have already uploaded the updated problem set to Teams. Before solving the problem, please make sure that you are using the updated version. The change concerns the last sentence: Moreover, for the sake of simpticity, assume that tabor productivity in the mtrao'abte goods sector is the same at home and abroad
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
