Suppose Australia, a land (K)-abundant country, and Sri Lanka, a labor(L)-abundant country, both produce labor and land intensive goods with the same technology.
-Use the diagram above to identify the pre-trade situation for Australia and Sri Lanka. Where on the K/L axis will you find each of the two countries?
Which of the two countries has a higher relative wage, w/r?
Which product is the labor intensive, and which is the land intensive one?
Show where the relative price of cloth to food will be found once trade opens between these two countries. Show where the relative wages of each will appear.
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A device used to transport an infant or young child by attaching them to an adult's chest or back, keeping the child secure and close.
2-year-old's Favorite
Often refers to the preferences or favorite activities/objects of a 2-year-old child, which significantly revolve around exploration and simplicity.
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A particular word preferred by an individual over others, often because of its meaning, sound, or personal significance.
Falls Off
Expresses a decline or reduction in quantity, quality, or intensity of a specific thing or activity.
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