Question

Consider the following environment: there are two countries, Micronesia and Polynesia. There is only one factor...

Consider the following environment: there are two countries, Micronesia and Polynesia. There is only one factor of production, labor. Two commodities can be produced, Boats and Fish. It takes 5 hours of a Micronesian’s worker time to carve 1 Boat, while a Polynesian can complete the same task in 4 hours. Catching 1 pound of Fish takes a Micronesian worker 0.5 hours while Polynesians require 1 hour. There are 1,000 worker-hours in Micronesia and 750 in Polynesia. Perfect competition prevails in all markets.

(1)Assume that the two countries are trading with each other and no one else. The overall Relative Demand is given by (Price of Fish/ Price of Boat) = 0.5 (Demand for Boats /Demand for Fish) Construct the Relative Supply curve. Put the relative quantity of Fish on the x-axis and the relative price of Fish on the y-axis. Find the equilibrium relative price and relative quantity, which clear the market.

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 the following environment: there are two countries, Micronesia and Polynesia. There is only one factor...
Consider the following environment: there are two countries, Micronesia and Polynesia. There is only one factor of production, labor. Two commodities can be produced, Boats and Fish. It takes 5 hours of a Micronesian’s worker time to carve 1 Boat, while a Polynesian can complete the same task in 4 hours. Catching 1 pound of Fish takes a Micronesian worker 0.5 hours while Polynesians require 1 hour. There are 1,000 worker-hours in Micronesia and 750 in Polynesia. Perfect competition prevails...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries are the only two countries in the world, at least for purposes of trade. There are two goods: Corn and Radio. Consumers always spend one-third of their income on Corn and the remainder on Radios. The only factor of production is labour. Each home country worker can produce 2 units of Corn or 3 units of Radios per unit of time, while each foreign...
Let us consider a model with two countries (H and F), one factor of production (Labor),...
Let us consider a model with two countries (H and F), one factor of production (Labor), and two goods (A and B). The following table provides the unit labor hours cost structure for the production of A and B in H and F respectively – Country 1 unit of A 1 unit of B H 80 90 F 120 100 Let us also assume that H and F has total labor hours endowment of 72,000 and 60,000 respectively. Using the...
There are two countries, Home and Foreign, in a hypothetical world. Each of these two countries...
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 and Foreign’s hourly wage rates, respectively. Goods Home Foreign X ALx=2 A*Lx=4 Y ALy=1 A*Ly=1...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries are the only two countries in the world, at least for purposes of trade. There are two goods: Corn and Radio. Consumers always spend one-third of their income on Corn and the remainder on Radios. The only factor of production is labour. Each home country worker can produce 2 units of Corn or 3 units of Radios per unit of time, while each foreign...
[One-factor model] Assume that there are 2 countries: Home and Foreign. And there are 2 goods:...
[One-factor model] Assume that there are 2 countries: Home and Foreign. And there are 2 goods: apple and banana. Home has 2,400 units of labor available. The unit labor requirement in apple production is 6, while in banana production it is 4. Foreign has 800 units of labor available. The unit labor requirement in apple production is 5, while in banana production it is 1. 1) What is the opportunity cost of apples in terms of bananas in Home and...
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...
two countries under autarky (when there is no trade), consider the following hypothetical scenario based on...
two countries under autarky (when there is no trade), consider the following hypothetical scenario based on Ricardian model. Assume throughout that those two countries (Italy and Sweden) are the only two countries in the world, at least for purposes of trade. There are two goods: shoes and calculators. Consumers in both countries always spend half of their income on shoes and half of their income on calculators. The only factor of production is labour. Each Italian worker can produce 1...
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...
In order to conjecture the circumstances in these two countries under autarky (when there is no...
In order to conjecture the circumstances in these two countries under autarky (when there is no trade), consider the following hypothetical scenario based on Ricardian model. Assume throughout that those two countries (Italy and Sweden) are the only two countries in the world, at least for purposes of trade. There are two goods: shoes and calculators. Consumers in both countries always spend half of their income on shoes and half of their income on calculators. The only factor of production...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT