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Assume two countries Wawa and Pawa with two factors of production: capital and labour. Each country...

Assume two countries Wawa and Pawa with two factors of production: capital and labour. Each country produces two goods: books and widgets. Books are capital intensive. Wawa is capital abundant. Assume the same technology in both countries. Explain the effects of an increase in a) capital stock and b) labour supply in each country.

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