Question

In autarky, wages generally: a. have no relationship to labor abundance. b. are lower in the...

In autarky, wages generally:

a.

have no relationship to labor abundance.
b.

are lower in the labor-abundant country than in the capital-abundant country.
c.

are higher in the labor-abundant country than in the capital-abundant country.
d.

are the same in the labor-abundant and the capital-abundant countries.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option B.

  • Autarky refers to an economic state wherein a country functions independently without any external interference.
  • Such countries function without any international trade in a completely closed economy.
  • In such an economy, wages generally are lower in the labour abundant country than in the capital abundance country.
  • This is because labour abundant countries imports more capital while export more capital while capital intensive countries exports more capital while import more labour.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In the Heckscher-Ohlin model with two large countries, the US and China; two goods, cloth, and...
In the Heckscher-Ohlin model with two large countries, the US and China; two goods, cloth, and wheat; and two factors, capital, and labor. The US is relatively capital abundant. Cloth is relatively labor-intensive. When these two countries move from autarky to trade with one another, we expect A a decrease in the relative price of wheat to cloth in the US and an increase in the relative price of wheat to cloth in China. B an increase in the relative...
The Heckscher-Ohlin theory predicts that the opening of trade between a land-abundant country and a labor-abundant...
The Heckscher-Ohlin theory predicts that the opening of trade between a land-abundant country and a labor-abundant country should result in: higher rents and wages in both countries. lower rents and wages in both countries. higher rents in the labor-abundant country and higher wages in the land-abundant country. higher wages in the labor-abundant country and higher rents in the land-abundant country.
An economy with better technology is likely to: A) have lower levels of human capital. B)...
An economy with better technology is likely to: A) have lower levels of human capital. B) use more labor than capital. C) achieve higher productivity. D) have less capital stock. 184) An aggregate production function: A) shows the relationship between a country's GDP and its factors of production. B) shows various quantities of two goods that can be produced at a given cost. C) shows various combinations of labor and capital that can be used to produce a particular good....
Consider a 2 good, 2 country, 2 factor Heckscher-Ohlin model. Taiwan is capital abundant. South Korea...
Consider a 2 good, 2 country, 2 factor Heckscher-Ohlin model. Taiwan is capital abundant. South Korea is labor abundant. Machinery is capital intensive to produce, textiles are labor intensive. The labor wage is w and the cost of capital is r. Consumers in the two countries have identical preferences over the two goods. Answer true or false for each statement below a) In autarky, prices of textiles relative to machinery are higher in South Korea than in Taiwan b) In...
Suppose there are two countries (a capital-abundant country and a labor-abundant country) and two goods (labor-intensive...
Suppose there are two countries (a capital-abundant country and a labor-abundant country) and two goods (labor-intensive good X and capital-intensive good Y). The two countries have identical demand for the two goods and are considering forming a free trade agreement. However, while this agreement received support from most voters in country A, many voters in country B were concerned that the agreement will likely widen income inequality in country B. Please identify which country is likely labor abundant and which...
Assume a two-country, two-good, two-factor of production world where the following relationships hold: (K/L)US > (K/L)ROW...
Assume a two-country, two-good, two-factor of production world where the following relationships hold: (K/L)US > (K/L)ROW (K/L)automobiles > (K/L)shoes Where (K/L)US is the capital-labor ratio in the United States, (K/L)ROW is the capital-labor ratio in the Rest of the World, (K/L)automobiles is the capital-labor ratio in the production of automobiles, and (K/L)shoes is the capital-labor ratio in the production of shoes. Assume further that technology and tastes are the same in the United States and the Rest of the World....
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country...
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country A has 60 units of labor and country B has 120 units of labor. The unit labor requirements are as follows: X Y Country A 1 2 Country B 2 3 a. Draw the PPF for each country b. Calculate the autarky prices for each country (Px/Py) c. Which country has an absolute advantage in good X? Good Y? Which has a comparative advantage...
1. If country X has a relative abundance of capital and country Y has a relative...
1. If country X has a relative abundance of capital and country Y has a relative abundance of labor, then the factor proportions theory predicts that: Select one: a. if the two nations begin trading with one another, labor will move to country X and give it a relative abundance of both inputs. b. if the two nations begin trading with one another, capital will flow to country Y and give it a relative abundance of both inputs. c. country...
1. When might the demand for labor shift outwards? A. When wages fall B. When labor...
1. When might the demand for labor shift outwards? A. When wages fall B. When labor productivity increases C. When demand for the product falls D. When the price of capital goods falls 2. When is an increase in investment most likely? A. When interest rates rise B. When managers become more optimistic about the economy C. When costs are expected to rise D. When revenues are expected to fall 3. When is the market capitalization of a business most...
Countries A and B have two factors of​ production, capital and​ labor, with which they produce...
Countries A and B have two factors of​ production, capital and​ labor, with which they produce two​ goods, X and Y. Technology is the same in the two countries. X is​ capital-intensive; A is​ capital-abundant. Analyze the effects on the terms of trade and the welfare of the two countries of the​ following: Event Terms of trade effect ​A's welfare ​B's welfare a. An increase in​ A's capital stock. ▼ A's improve A's worsen ▼ Increases Decreases Ambiguous ▼ Increases...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT