Many reasons for why the United Kingdom voted to leave the
European Union have been proposed. A common one is that imports
from the EU hurt low-skilled British workers. Suppose that there
are two industries, financial services and manufacturing. Further
assume that there are two factors of production, low- skilled and
high-skilled workers, and that finance is high-skill intensive and
manufacturing is low-skill intensive. Further assume that the
United Kingdom is abundant in high-skill labour.
a) Show using the Heckscher-Ohlin...