Question

Based on the following information and assumptions answer the question below: A) There are 2 countries:...

Based on the following information and assumptions answer the question below:

A) There are 2 countries: A and B.

B) There are 2 goods: cheese (c) and wine (w).

C) There are 2 factors: capital (k) and labor (l).

D) Country A is relatively well endowed with k.

E) Country B is relatively well endowed with l.

F) Cheese (c) is the capital intensive industry.

G) A and B have identical preferences and technologies.

Question:

Illustrate, using the PPF-social indifference curve diagrams, the autarky position of these 2 countries. Be sure to indicate the autarky domestic prices.

1. Explain which country will export cheese and why?

Illustrate the new equilibrium conditions for both countries after they have opened up to trade. Explain your diagrams.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
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...
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...
Answer questions based on the following information: There are two countries, Home and Foreign, in a...
Answer questions based on the following information: There are two countries, Home and Foreign, in a hypothetical world. Each of these two countries are Ricardian economies. Each country is endowed with 1000 labor hours, which can be used to produce goods X and Y. The following table shows labor requirements per unit of each good in each country. Perfect competition prevails everywhere in the two-country world. Suppose that wand w* represent Home’s andForeign’s hourly wage rates, respectively. Goods Home Foreign...
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...
1.There are two countries, Home and Foreign. Both countries produce food (F) and cloth (C) using...
1.There are two countries, Home and Foreign. Both countries produce food (F) and cloth (C) using labour (L) and capital (K). Labour and capital are currently allocated in the following way between the sectors. Home: LF = 200 KF = 150 LC = 100 KC = 50 Foreign: LF* = 600 KF* = 300 LC* = 480 KC* = 120 Which of the following is TRUE? Select one: a. Not enough of information to tell which country is labour or...
QUESTION 11 Consider a case where a country imports of very large quantity of Good R...
QUESTION 11 Consider a case where a country imports of very large quantity of Good R and the Terms of Trade Effects Tariff Model holds. When the country changes from trade in Good R without a tariff to trade in Good R with a tariff (assuming no retaliation on that product), a. the total surplus of foreign producer countries falls and the world total surplus falls b. the total surplus of foreign producer countries falls and the world total surplus...
) Consider Home produces computers(C) and food(F) using capital(C) and labor(L). The unit factor requirements are...
) Consider Home produces computers(C) and food(F) using capital(C) and labor(L). The unit factor requirements are fixed and given by: aLC = 2, aKC = 6, aLF = 3, aKF = 4. The total labor supply is 900 and the total capital stock is 1,500. (1 point) a. Which good is relatively labor intensive? Which good is relatively capital intensive? (2 points) b. Derive and draw the PPF of this country. At which point on the PPF are both factors...
Consider two countries, Home and Foreign, engaged in free international trade. Each country produces two products,...
Consider two countries, Home and Foreign, engaged in free international trade. Each country produces two products, A and B, using Capital (K) and Labour (L). Capital and Labour are mobile between sectors, but are immobile internationally. Home exports product A, which is relatively capital intensive in production. Home experiences growth in the form of an increase in its capital stock. The following questions ask you to explain various consequences of this growth. In doing so, you must provide your detailed...
Consider two countries, Home and Foreign, engaged in free international trade. Each country produces two products,...
Consider two countries, Home and Foreign, engaged in free international trade. Each country produces two products, A and B, using Capital (K) and Labour (L). Capital and Labour are mobile between sectors, but are immobile internationally. Home exports product A, which is relatively capital intensive in production. Home experiences growth in the form of an increase in its capital stock. The following questions ask you to explain various consequences of this growth. In doing so, you must provide your detailed...
Question: 1. Based on the table, answer the following questions. (1) (2) (3) (4) (5) (6)...
Question: 1. Based on the table, answer the following questions. (1) (2) (3) (4) (5) (6) (7) K L Q MPK APK APL VMPK 0 20 0 - - - - 1 20 50 100 2 20 150 200 3 20 300 300 4 20 400 200 5 20 450 100 6 20 475 50 7 20 475 0 8 20 450 -50 9 20 400 -100 10 20 300 -200 11 20 150 -300 A firm’s product sells for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT