Question

Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country: Computers: Sales Revenue = $P_c \times Q_c = 100$ Payments to Labor = $W \times L_c = 50$ Payments to Capital = $K_c \times R = 50$ Percentage change in price of computers = $\frac{\Delta P_c}{P_c} = 10%$ Shoes: Sales Revenue = $P_s \times Q_s = 100$ Payments to Labor = $W \times L_s = 25$ Payments to Capital = $K_s \times R = 75$ Percentage change in price of shoes = $\frac{\Delta P_s}{P_s} = 20%$ Based on the given information: 1. The relative price of computers ($P_{Computers}/P_{Shoes}$) [Select] under trade. 2. Based on the relative price change. The country exports [Select] and imports [Select] 3. In this question, [Select] is capital intensive, and [Select] is labor intensive.

          Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country:
Computers:
Sales Revenue = $P_c \times Q_c = 100$
Payments to Labor = $W \times L_c = 50$
Payments to Capital = $K_c \times R = 50$
Percentage change in price of computers = $\frac{\Delta P_c}{P_c} = 10%$
Shoes:
Sales Revenue = $P_s \times Q_s = 100$
Payments to Labor = $W \times L_s = 25$
Payments to Capital = $K_s \times R = 75$
Percentage change in price of shoes = $\frac{\Delta P_s}{P_s} = 20%$
Based on the given information:
1. The relative price of computers ($P_{Computers}/P_{Shoes}$) [Select] under trade.
2. Based on the relative price change. The country exports [Select] and imports [Select]
3. In this question, [Select] is capital intensive, and [Select] is labor intensive.

Suppose that there are drastic technological improvements in shoe production at Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country:
Computers:
Sales Revenue = Pc × Qc = 100
Payments to Labor = W × Lc = 50
Payments to Capital = Kc × R = 50
Percentage change in price of computers = (Δ Pc)/(Pc) = 10%$
Shoes:
Sales Revenue =Ps ×Qs = 100Payments to Labor =W ×Ls = 25Payments to Capital =Ks ×R = 75Percentage change in price of shoes =(ΔPs)/(Ps) = 20%$
Based on the given information:
1. The relative price of computers (PComputers/PShoes) [Select] under trade.
2. Based on the relative price change. The country exports [Select] and imports [Select]
3. In this question, [Select] is capital intensive, and [Select] is labor intensive.

Added by Meghan M.

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