Using a diagram similar to Figure 4-12, show the effect of a decrease in the relative price

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Using a diagram similar to Figure 4-12, show the effect of a decrease in the relative price of computers in Foreign. What happens to the wage relative to the rental? Is there an increase in the labor/capital ratio in each industry? Explain.

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International Economics

ISBN: 978-1429278447

3rd edition

Authors: Robert C. Feenstra, Alan M. Taylor

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Question Posted: Feb 04, 2016 05:28 AM

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Using a diagram similar to Figure 4-12, show the effect of a decrease in the relative price

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With free trade the laborabundant Foreign country will increase production of ...View the full answer

International Economics

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