Relative Home Unit Labor Requirement (aLi) Foreign Unit Labor Requirement (a*Li) Good Home Productivity Advantage (a Li/aLi) 10 10 Apples 40 Bananas 3 12 4. Caviar 12 2. Dates 12 6. 0.75 Enchiladas Given the information above in the context of a more than two good Ricardian model and the fact that the relative home wage was 4 and the nominal foreign wage was $3, what would be the world relative price of bananas be with world equilibrium in the labor market? A. $3 B. $4 C. $5 D. $12 E. None of the above.
Relative Home Unit Labor Requirement (aLi) Foreign Unit Labor Requirement (a*Li) Good Home Productivity Advantage (a Li/aLi) 10 10 Apples 40 Bananas 3 12 4. Caviar 12 2. Dates 12 6. 0.75 Enchiladas Given the information above in the context of a more than two good Ricardian model and the fact that the relative home wage was 4 and the nominal foreign wage was $3, what would be the world relative price of bananas be with world equilibrium in the labor market? A. $3 B. $4 C. $5 D. $12 E. None of the above.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 27CTQ: Describe a situation, either a government policy situation, an economic problem, or a private sector...
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