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    International Economics
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    Exam 4: Factor Endowments and the Commodity Composition of Trade
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    Suppose That Capital in a Comparative Disadvantage Industry Cannot Move
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Suppose That Capital in a Comparative Disadvantage Industry Cannot Move

Question 1

Question 1

Essay

Suppose that capital in a comparative disadvantage industry cannot move out of that industry in the short run. Describe what happens to the return to capital in the comparative disadvantage and comparative advantage industries.

Correct Answer:

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