Suppose that home has 2400 workers, but they are only half as productive in both industries as we have been assuming. Construct the world relative supply curve and determine the equilibrium relative price. How do the gains from trade compare with those in the case described in problem 4. that is suppose that instead of 1200 workers, home had 2400.
Answer:
it will shift he production possibilities frontier in some way.
just figure out how much they can make if they concentrate in one good, then another, then connect them with a line.
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