Consider two countries: Albania, relatively abundant in low-skill labour, and Switzerland, relatively
abundant in high-skill labour. Assume high- and low-skill labour are the only factors used in the
production of the only two existing goods, and that neither type of labour are allowed to move
across countries. Suppose that, initially, Albania is closed to trade. If later Albania joins the EU and
hence the free trade agreement (FTA) with Switzerland (with no labour mobility), then:
a.
low-skill workers would benefit from this only in Switzerland and lose in Albania
b.
low-skill workers would benefit from this in both countries
c.
high-skill workers would benefit from this in both countries
d.
high-skill workers would benefit from this only in Switzerland and lose in Albania.
Consider two countries Albania relatively abundant in low.pdf
1. Consider two countries: Albania, relatively abundant in low-skill labour, and Switzerland, relatively
abundant in high-skill labour. Assume high- and low-skill labour are the only factors used in the
production of the only two existing goods, and that neither type of labour are allowed to move
across countries. Suppose that, initially, Albania is closed to trade. If later Albania joins the EU and
hence the free trade agreement (FTA) with Switzerland (with no labour mobility), then:
a.
low-skill workers would benefit from this only in Switzerland and lose in Albania
b.
low-skill workers would benefit from this in both countries
c.
high-skill workers would benefit from this in both countries
d.
high-skill workers would benefit from this only in Switzerland and lose in Albania
