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QUESTION
What if Country A and Country B are completely identical except for the fact that A has more Kx ? In Neary-bucket diagram? In PPF diagram?
What if Country A and Country B are completely identical except for the fact that A has more Kx ? In Neary-bucket diagram? In PPF diagram? For a given Px /Py , Country A will supply a higher Sx /Sy than Country B 1.2. Distributional conflict Focus only on what happens in Country A What happens to Px /Py when Country A moves from autarky to free trade? (Hint: for simplicity, let Py = 1).) Who benefits and who loses?
