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Question: Use the Heckscher-Ohlin Model for England and Ireland to produce corn and beer. The only two factors of production are labor and land, and England is land abundant.
A) If corn production is land intensive, what is the shape of PPF curve for England and Ireland?
B) If demand is identical in the two countries (same preference maps) which nation will have the comparative advantage in corn?
C) How will the landlords in England feel about trade with Ireland?
D) After trade, what will happen to the (real) income of labor in England?
Graphical analysis and economic reasoning are required to support your answer.
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