Please help me to figure it out, I have no idea how to do on this question. Thanks!
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7. This question asks you to analyze trade patters in the context of the SpecificFactors model. Suppose the USA is engaging in world trade. There are two goodsproduced, cars and soy beans. The production of soy beans requires labor andland, and the production of cars requires capital and labor. (a) (1 point ) Given this set up, What is the mobile factor of production? Howcan you tell? (b) (2 point) Show graphically what happens to wages and the allocation of laboracross sectors if the world price for soy beans increases.
