Question: REALLY could use the help with this econ practice question. Thanks! 2. [20 points] For this question, use the standard neoclassical model of trade. Suppose
REALLY could use the help with this econ practice question. Thanks!
2. [20 points] For this question, use the standard neoclassical model of trade. Suppose the world consists of two regions: North and South. There are two goods: agriculture (labeled as 1) and manufacturing (labeled as 2). Initially, North exports manufacturing and imports agriculture. Use a diagram that has quantity of good 2 on the y-axis and of good 1 on the x-axis from the perspective of South. The diagram must incorporate the production possibility frontier of South, as well as relevant iso-value lines and indifference curves. Suppose terms-of-trade of South increases. Use your diagram to show how welfare in South changes. 2. [20 points] For this question, use the standard neoclassical model of trade. Suppose the world consists of two regions: North and South. There are two goods: agriculture (labeled as 1) and manufacturing (labeled as 2). Initially, North exports manufacturing and imports agriculture. Use a diagram that has quantity of good 2 on the y-axis and of good 1 on the x-axis from the perspective of South. The diagram must incorporate the production possibility frontier of South, as well as relevant iso-value lines and indifference curves. Suppose terms-of-trade of South increases. Use your diagram to show how welfare in South changes
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