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There are two countries, Home and Foreign. The two countries can produce two goods, socks (S) and hats (H) using only labour.- 1. Assume that the free trade consumption bundle is DH = 100 and Ds = 150 for Home and DH = 50 and Ds = 150 for Foreign. S

P.S: (3）is the world relative price =3

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Answer #1

I think your question is whether Pw=3 can be an equilibrium world price. Here is the way of how you can check it -

Giren that, Hot Home Shoe 04 4 as= 2 alt=5 a 1 Totou Lobor 20 2 600 Forieg 300, ale au First of a. it seems that, au 4.2. One(2) Here we will finsk check whethon wored telo price pra 3 on equilibrium price firstly, we love to dorive Homes Ppp, which. moll ket 1. hot or wored Total fou Supply supply of Fortin on fortegn. How by Home and - Total supply or hot by Home - SH+

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