Question

In a Ricardian model with 2 goods, cloth C and water W, the unit labor input requirements are: aLC = 4, aLW = 2, aLC = 1, aLW = 2 (* for foreign country variable). The supply of labor in each country is 10. The world relative demand is given by: RD = 4 - 2(Pc/Pw) Assume throughout that the price of good W in each country is constant and equal to 1 in both autarky and free trade. Find the values of Pc, Pc, w, and w in the autarky equilibrium. Find the values of Pc, Pc, Qc, Qc, Qw, Qw, w, and w in the free trade equilibrium. Compare the real wages of each country in autarky to free trade. Suppose the supply of labor in the foreign country increases to 20. Illustrate the shift in the world relative supply schedule, and find the values of Pc, Pc, Qc, Qc, Qw, Qw, w, and w in the new free trade equilibrium.

          In a Ricardian model with 2 goods, cloth C and water W, the unit labor input requirements are:
aLC = 4,
aLW = 2,
a*LC = 1,
a*LW = 2 (* for foreign country variable). The supply of labor in each country is 10. The world relative demand is given by:
RD = 4 - 2(Pc/Pw)
Assume throughout that the price of good W in each country is constant and equal to 1 in both autarky and free trade.
Find the values of Pc, Pc*, w, and w* in the autarky equilibrium.
Find the values of Pc, Pc*, Qc, Q*c, Qw, Q*w, w, and w* in the free trade equilibrium.
Compare the real wages of each country in autarky to free trade.
Suppose the supply of labor in the foreign country increases to 20. Illustrate the shift in the world relative supply schedule, and find the values of Pc, Pc*, Qc, Q*c, Qw, Q*w, w, and w* in the new free trade equilibrium.

in a ricardian model with 2 goods cloth c and water w the unit labor input requirements are alc 4 alw 2 alc 1 alw 2 for foreign country variable the supply of labor in each country is 10 wor 50428

Added by Meredith P.

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