please answer parts a-f
3. Specific Factors Model of Trade Businesses in Finland have made investments that have created stocks of capital that a devoted to either telecommunications or business services (B) a) Suppose that Finland is not trading. Draw the specific factors indicating how labor is divided between the two industries, and showing the prevailing wage w b) Suppose before trade that the relative price of telecommunications to services is 4 in Finland while the relative price for the rest of What do you about the world price of telecommunications to business services once trade starts? c) Modify your diagram to show how Finland’s labor allocation and wage change when it opens trade with the rest of the world. d) How does the opening of trade affect capital owners in Finland’s business services industry? Describe and show on your graph. e) Can you predict whether Finnish workers are likely to benefit or lose from the opening of trade? Explain Suppose Finnish workers consume as much telecommunications as they can, while they buy very few business services. How does this affect the likely magnitude of worker gains or loses?
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