Question

Suppose two countries allow both free trade in goods and free flows of factors. Why would...

Suppose two countries allow both free trade in goods and free flows of factors. Why would it be difficult to predict the extent and pattern of trade in goods between them?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

It will be difficult t predict the extent and pattern of trade in goods between them because there is no information about the goods which each produce and specializes in and also the intensity with which the factors are used in the production of goods. To determine the extent and pattern of trade in goods between them information on each factor, number of units produced by each factor etc is needed. In the absence of all the information above, it becomes difficult to determine the extent and pattern of trade between nations.

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
Develop a trade between two countries that benefits them both The table shows the number of...
Develop a trade between two countries that benefits them both The table shows the number of rice and phones that can be produced in FRANCE and England with 7 days of labor assume that no other resources are needed to produce these goods . France England If Produce only Rice 100 250 If Produce only Phones 200 250 If the 2 countries France and England wanted to trade with each other. What trade would benefit them both? Would the answer...
Suppose there are two countries Thailand and Vietnam. Both countries produce banana and textile from two...
Suppose there are two countries Thailand and Vietnam. Both countries produce banana and textile from two factor inputs, labor and land. While Thailand is land-abundant, Vietnam is labor-abundant. Finally, both countries are identical in consumer's preferences (i.e., consumers always choose the equal quantity of the two goods, for example) and production techniques (i.e., production technique for banana is land-intensive and that for textile is labor-intensive). 1. Consider the production possibility frontiers for the two countries that are appropriate to the...
Show in graph. In a two country model with two goods and two factors, both countries...
Show in graph. In a two country model with two goods and two factors, both countries have the same technology and equal endowments of labour. Although tastes are homothetic in each country, the ratio of capital- intensive to labour intensive consumption is lower for the foreign than for the home country, at any common set of product prices. If the home country exports capital-intensive good in this equilibrium, which country must have the smaller endowment of capital?
Consider the simple Ricardian model with two countries and two goods, and explain carefully why, when...
Consider the simple Ricardian model with two countries and two goods, and explain carefully why, when two countries trade, the smallest of the two countries is more likely to enjoy large gains from trade.
Consider a two countries, Portugal and England, that produce two goods, wine and cheese, with only...
Consider a two countries, Portugal and England, that produce two goods, wine and cheese, with only one factor of production, Labor. In Portugal, one unit of labor can produce 1 unit of wine or 1 unit of cheese. In England, one unit of labor can produce 1 unit of wine or 2 of cheese. There are 100 units of labor in Portugal, and 100 in England. Countries share the same tastes, and there is perfect competition. 1) Fill in the...
Trade barriers Suppose there are only two countries in the world (Home and Rest of the...
Trade barriers Suppose there are only two countries in the world (Home and Rest of the World) which produce and consume wheat. The price of wheat in Rest of the World is equal to 2 and Home is a small country with the following demand and supply functions for wheat: ?h = 50 − 10? ?h = 30 + 10? a. Compute and graph the equilibrium in the absence of trade. What would be the consumer and producer surplus? b....
Suppose that only two countries, the US and Japan, are involved in the international trade of...
Suppose that only two countries, the US and Japan, are involved in the international trade of automobiles. The relevant supply and demand functions for the US and Japan are: DUS = 100 – 15PUS DJapan = 100 -10PJ SUS = 5 PUS SJapan = 40 + 40PJ Moreover, there is a transport cost of λ=1 per car traded. 1. Calculate the world price under free trade and the quantity traded at this price. Determine the welfare gains from free trade...
5. Why similar countries trade Consider two hypothetical countries called Cassvania and Koopmansville. The countries have...
5. Why similar countries trade Consider two hypothetical countries called Cassvania and Koopmansville. The countries have similar production technology, and yet they specialize and trade with each other. Read the following details and determine why international trade is possible between these two countries. Both nations have abundant farmland and could either grow grains or raise livestock. If farmers in the same area produce a lot of the same type of product, they are able to do so at a cheaper...
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...
We look at two countries, the US and China, that trade with each other. There are...
We look at two countries, the US and China, that trade with each other. There are two factors of production, namely high-skilled labor and low-skilled labor. The US is relatively abundant in high-skilled labor and China is relatively abundant in low-skilled labor. Trade between these two countries will A. benefit high-skilled labor in both countries. B. benefit low-skilled labor in both countries. C. benefit high-skilled labor in the US and low-skilled labor in China. D. benefit low-skilled labor in the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Suppose that people's heights (in centimeters) are normally distributed, with a mean of 170 and a...
    asked 3 minutes ago
  • Use the information from the following Income Statement to create and Projected Income Statement and solve...
    asked 16 minutes ago
  • An unequal tangent vertical curve has the following elements: g1=-3.25%, g2=75%, total length = 500.00’, length...
    asked 18 minutes ago
  • Please write clear definitions of the following legal terms. Commerce Clause Supremacy Clause Indictment Tort
    asked 23 minutes ago
  • Do you think Moralistic Therapeutic Deism is an accurate reflection of society today? What are relevant...
    asked 27 minutes ago
  • The mean operating cost of a 737 airplane is $2,071 per day. Suppose you take a...
    asked 36 minutes ago
  • Arguments can be made on both sides of this debate about the ethical implications of using...
    asked 42 minutes ago
  • In the Chapter, they mention the idea of strategizing around your cash flows. Why are cash...
    asked 47 minutes ago
  • Company A signed a fixed-price $6,500,000 contract to construct a building. At the end of Year...
    asked 48 minutes ago
  • An unequal tangent vertical curve has the following elements: g1=-3.25%, g2=1.75%, total length = 500.00’, length...
    asked 55 minutes ago
  • In a previous​ year, 61​% of females aged 15 and older lived alone. A sociologist tests...
    asked 1 hour ago
  • Topic: Construction - Subsurface Investigation (Note: Briefly discuss in your own words, 1 paragraph minimum.) Typically...
    asked 1 hour ago