All the best. Use the information given in question 1. Consider the information in questions 1 and 2. In free trade USA will produce 6 units of wheat. Consider the information given in questions 1,2 and 3.
Free trade is optimal, both labor and capital benefit.
Assume that Colombia is labor abundant, Brazil is capital abundant, the calculator industry is capital intensive and the airplane industry is labor intensive. Labor is mobile between the two industries within each country but capital is immobile in the short run. We are right now concerned with the short run. Assume that you live in Colombia. The nominal returns to capital increases b.