Two sectors-clothing and car production

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Please help me with the following questions:

Consider an economy with two sectors: clothing and car production. There are two factors used in the production of both industries: labor, mobile between the industries and capital specific to each industry. This economy is involved international trade, then in case the world price of cars decreases and price of clothes does not change:

1) Real earnings of capital owners in car industry will decrease, real earnings of capital owners in clothes industry will increase

2) Nominal earnings of capital owners in car industry will decrease, real earnings of capital owners in clothes industry will decrease

3) Real earnings of capital owners in car industry will increase, nominal earnings of capital owners in clothes industry will increase

4) Nominal earnings of capital owners in car industry will increase, nominal earnings of capital owners in clothes industry will increase

Reference no: EM132270348

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