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Business, 07.05.2021 21:20 Savy8595

Turkey and Germany produce cars (C) and food (F) using capital and labour. Markets are competitive and technologies are identical in both countries. Producing a car requires 8 units of capital and 8 units of labour. Food production requires 6 units of capital and 10 units od labour. Turkey is endowed with 800 units of capital and 1200 units of labour. In Germany, there are are 1000 units of capital and X units of labour, where X is a positive number. In each country, factors of production are fully mobile across industries. Transitioning from autarky to free trade will increase welfare of capitalists in Germany if: a) X> 750

b) X<800

c) X>1200

d) X<1500

e) X<1200

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