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Business, 22.02.2020 05:19 rehooreh14

1. [6 points] Consider the Ricardian model with two economies (Mexico and the U. S.A.) and two commodities (goods and services). The marginal products of labor for each commodity are as follows: Services Goods Mexico │ MPL*S = 1/4 MPL*G = 1/2 U. S.A. │ MPLS = 1 MPLG = 1 Assume the two economies are closed and prices of Services are: pS = $2, and p*S = 12 pesos. (a) Calculate the autarky price of Goods in both countries: pG, and p*G

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1. [6 points] Consider the Ricardian model with two economies (Mexico and the U. S.A.) and two commo...
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