Which Theorem accounts for the change in total capital between autarky and free trade? What does this theorem predict will happen with this change?
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Autarky
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Free-Trade
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Production of good X
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100 units
|
200 units
|
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Consumption of good X
|
100 units
|
100 units
|
|
Capital used to produce good X
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100 units
|
200 units
|
|
Labor used to produce good X
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100 days
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125 days
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|
Production of good Y
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100 units
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50 units
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|
Consumption of good Y
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100 units
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200 units
|
|
Capital used to produce good Y
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150 units
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100 units
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|
Labor used to produce good Y
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50 days
|
25 days
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