In the (Standard) Specific Factors Model of a small open economy. Two goods are produced. Good...

 

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In the (Standard) Specific Factors Model of a small open economy. Two goods are produced. Good X requires land and labor. Good Y requires capital and labor. The country is initially under autarky. Analyze the effects on i) outputs of the goods, X and Y, ii) the real wage of labor, iii) the real rental price of land in the X industry a. A fall in the price of good Y, holding the price of good X constant. b. An increase in the size of the labor force. In the (Standard) Specific Factors Model of a small open economy. Two goods are produced. Good X requires land and labor. Good Y requires capital and labor. The country is initially under autarky. Analyze the effects on i) outputs of the goods, X and Y, ii) the real wage of labor, iii) the real rental price of land in the X industry a. A fall in the price of good Y, holding the price of good X constant. b. An increase in the size of the labor force.

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Step 11 Explanation Two goods Good X land and labor Good Y capital and labor Autarky is an econ... View the full answer