question archive Consider two countries, Vietnam and China, producing two goods, textile and televisions by using capital and labor
Consider two countries, Vietnam and China, producing two goods, textile and televisions by using capital and labor
Subject:EconomicsPrice: Bought3
Consider two countries, Vietnam and China, producing two goods, textile and televisions by using capital and labor. Suppose that textile is relatively labor-intensive. Vietnam has 20 units of capital and 16 units of labor andChina has 300 units of capital and 150 units of labor.
a) Which country is relatively capital-abundant ? Explain.(5p)
b) Which country will export textile? Explain. (3p)
c) In Vietnam the production of which good decreases under trade? In China? (5p)
d) When trade occurs between Vietnam and China, what happens to price of labor, price of capital in Vietnam? (3p)
e) When trade occurs between Vietnam and China, what happens to price of labor, price of capital in China? (4p)
