Making it relatively more productive in automobiles

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Reference no: EM131071608

Assume Norway and Sweden trade with each other, with Norway exporting fish to Sweden, and Sweden exporting Volvos (cars) to Norway. Illustrate the gains from trade between Norway and Sweden using the standard trade model, assuming first that tastes for the goods are the same in both countries, but the production possibility frontiers are different since Norway has a long coast that borders on the north Atlantic, which makes it easier to catch fish, and Sweden has greater endowment in capital, making it relatively more productive in automobiles

Reference no: EM131071608

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