Show everything step by step please! You are a consultant for the Cameroonian government, which has asked you to determine how

Cameroonians are affected by imports of wheat from Germany? And how would they be affected

by removing the subsidies (from the German government and the EU) on German wheat.

Assume the following:

There are two goods produced in Cameroon and Germany, wheat and minerals.

Technology is the same in both countries. (Strong assumption, I know)

There are 3 factors of production: Land which is specific to wheat, capital which is

specific to minerals, and labor, which is the mobile factor.

Assume that in Cameroon, land is owned only by Cameroonians, but capital is owned by

companies from developed countries like Canada and the US.

Assume that the pre-trade prices of wheat and minerals in Cameroon were 3$ and 3$, and

the current world prices of wheat and mineral are 1.5$ and 3$.

Assume that opening the economy of Cameroon to trade has no impact on the world prices

(Cameroon is too small to have any effect on world prices)

Assume that the removal of German wheat subsidies would increase the world price of

wheat from $1.5 to $3.

a. How the opening of Cameroonian economy to trade with Germany has affected the allocation

of labor between the two sectors in Cameroon? Illustrate your answer graphically using the

labor demand curves in minerals and wheat (pre-trade and after trade). Explain your

answer briefly in words.

b. Determine how Cameroonian landowners are affected by opening the Cameroonian economy to

trade with Germany? What about capital owners? Explain

c. How Cameroonian workers are affected? Show your work!

d. How would the Cameroonian landowners be affected by removal of German wheat subsidies?

You may explain in words or/and illustrate your answer graphically

Answer rating: 100% (QA)

a The opening of the Cameroonian economy to trade with Germany affects the allocation of labor between the two sectors in Cameroon Before trade the la... View the full answer