question and answer
September 3, 2020
Question 14 When firms invest less because people are saving less, it is called the: international trade effect. wealth effect. interest rate effect….
September 3, 2020

Hi This is concerning the standard trade model

so,

Qc= quantity of cloth

Qf= quantity of food

Pc= price of cloth

Pf= price of food

V=aQc^2+Qf^2 is the PPF or TT

V=PcQc+PfQf is isovalue line

U= Dc^(1/2)*Df^(1/2)

find optimal Qc and Qf from isovalue line and PPF

KM
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