Homework Answers
Ans16) the correct option is C) outside its production possibilities frontier
Ans17) the correct option is a) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per hour.
Ans18) the correct option is e. Free trade can be beneficial to the economic welfare of all countries involved.
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16. A nation engaging in trade according to the Ricardian model will find its consumption bundle:...
17) Assume that labor is the only factor of production and that wages in the U...
17) Assume that labor is the only factor of production and that wages in the U hour while wages in Japan s the only factor of production and that wages in the United States equal $20 per UUE WHITE wages in Japan are S10 per hour. Protein costs would be lower in the United St compared to Japan if A) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per mon B) U.S. Tabor productivity equaled 30...
Question 12 State the Heckscher-Ohlin Theorem. Suppose there are two countries, USA and Germany. USA is...
Question 12 State the Heckscher-Ohlin Theorem. Suppose there are two countries, USA and Germany. USA is regarded as the home country and Germany is the foreign country. USA has 100 units of labor available and Germany has 80 units of labor. Both countries can produce only two goods, airplanes and cars. The output per hour of labor in the production of airplanes in the USA is 12, while in car production the output per hour of labor is 6. In...
Consider a 2-good 2-country Ricardian model of trade where labour productivity differences are due to different...
Consider a 2-good 2-country Ricardian model of trade where
labour productivity differences are due to different levels of
“institutions”. The 2 goods are airplanes and frozen chicken and
the 2 countries Japan and Mozambique. The unit labour requirements
are given in the table below. a. Give one reason why “institutions”
may affect labour productivity differently for the 2 goods. b.
Which country has a comparative advantage in frozen chicken?
Explain which steps you take to find this answer. c. Assume...
In 2018, U.S. President Donald Trump argued that his country's trade agreements with other countries were...
In 2018, U.S. President Donald Trump argued that his country's trade agreements with other countries were bad for the United States and were unfairly benefiting America's trading partners. What does the theory of the gains from trade have to say about such arguments? In general, the basic theory of the gains from trade O A. suggests that free international trade leads increased consumption possibilities for all countries involved (as long as there are differences in opportunity costs). Free trade cannot...
Ricardian Model of Trade given unit labor requirements for two countries. Please do c, d, e...
Ricardian Model of Trade given unit labor requirements for two
countries. Please do c, d, e
Assume Japan has a labour force of 1000. Draw its production possibility frontier Let's say Japan is in autarky and consumes 100 airplanes and 300 chickens. Could it do any better than this without opening up to trade? Can Japan gain from trade with Mozambique? Show it graphically. c. d. e. JapanMozambique a。.=10 Airplane a 4 Frozen chicken
Consider a 2-good 2-country Ricardian model of trade where labour productivity differences are due to different...
Consider a 2-good 2-country Ricardian model of trade where
labour productivity differences are due to different levels of
“institutions”. The 2 goods are airplanes and frozen chicken and
the 2 countries Japan and Mozambique. The unit labour requirements
are given in the table below.
2. Institutions as a source of comparative advantage Consider a 2-good 2-country Ricardian model of trade where labour productivity differences are due to different levels of "institutions". The 2 goods are airplanes and frozen chicken and...
II. The Ricardian Model and Paul Samuelson [3 pts each, 18 points total] Consider two countries...
II. The Ricardian Model and Paul Samuelson [3 pts each, 18 points total] Consider two countries of U.S. and China, two goods of Goodi and Good2 in a Ricardian model with the following information of labor productivity and labor endowment in each country. Table 1: Assumptions Labor Productivity (MPL) Labor Goodi Good2 Endowment United States II1 = 2 II2 = 1/2 100 China Tt1 = 1/20 12 = 2/10 1000 Suppose that before trade each country allocates 50% its labor...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F G Vaccine doses (millions) Guns 10,000 19,000 24,000 28,000 30,000 31,000 17. According to the information in Table 2.1, what is the opportunity cost of producing the first one million vaccines? (a) 1,000 guns (b) 30,000 guns (e) 31,000 guns (d) one million vaccines (e) five million vaccines 19. In Table 2.1, opportunity costs (a) Increase as more vaccines are produced (b) A reconstanta...
8. Problems and Applications Q8 Suppose that in a year an American worker can produce 60...
8. Problems and Applications Q8 Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. U.S. PPF China PPF Quantity of Computers (Millions) HHHHHHHHHH...
14. Problems and Applications Q8 Suppose that in a year an American worker can produce 100...
14. Problems and Applications Q8 Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts or 10 computers. blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. 30 T 27 U.S PPF China PPF 15 12 U.S. without Trade China without Trade 0 10 20 30...
17) Assume that labor is the only factor of production and that wages in the U hour while wages in Japan s the only factor of production and that wages in the United States equal $20 per UUE WHITE wages in Japan are S10 per hour. Protein costs would be lower in the United St compared to Japan if A) U.S. labor productivity equaled 40 units per hour and Japan's 15 units per mon B) U.S. Tabor productivity equaled 30...
Consider a 2-good 2-country Ricardian model of trade where
labour productivity differences are due to different levels of
“institutions”. The 2 goods are airplanes and frozen chicken and
the 2 countries Japan and Mozambique. The unit labour requirements
are given in the table below. a. Give one reason why “institutions”
may affect labour productivity differently for the 2 goods. b.
Which country has a comparative advantage in frozen chicken?
Explain which steps you take to find this answer. c. Assume...
In 2018, U.S. President Donald Trump argued that his country's trade agreements with other countries were bad for the United States and were unfairly benefiting America's trading partners. What does the theory of the gains from trade have to say about such arguments? In general, the basic theory of the gains from trade O A. suggests that free international trade leads increased consumption possibilities for all countries involved (as long as there are differences in opportunity costs). Free trade cannot...
Ricardian Model of Trade given unit labor requirements for two
countries. Please do c, d, e
Assume Japan has a labour force of 1000. Draw its production possibility frontier Let's say Japan is in autarky and consumes 100 airplanes and 300 chickens. Could it do any better than this without opening up to trade? Can Japan gain from trade with Mozambique? Show it graphically. c. d. e. JapanMozambique a。.=10 Airplane a 4 Frozen chicken
Consider a 2-good 2-country Ricardian model of trade where
labour productivity differences are due to different levels of
“institutions”. The 2 goods are airplanes and frozen chicken and
the 2 countries Japan and Mozambique. The unit labour requirements
are given in the table below.
2. Institutions as a source of comparative advantage Consider a 2-good 2-country Ricardian model of trade where labour productivity differences are due to different levels of "institutions". The 2 goods are airplanes and frozen chicken and...
II. The Ricardian Model and Paul Samuelson [3 pts each, 18 points total] Consider two countries of U.S. and China, two goods of Goodi and Good2 in a Ricardian model with the following information of labor productivity and labor endowment in each country. Table 1: Assumptions Labor Productivity (MPL) Labor Goodi Good2 Endowment United States II1 = 2 II2 = 1/2 100 China Tt1 = 1/20 12 = 2/10 1000 Suppose that before trade each country allocates 50% its labor...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F G Vaccine doses (millions) Guns 10,000 19,000 24,000 28,000 30,000 31,000 17. According to the information in Table 2.1, what is the opportunity cost of producing the first one million vaccines? (a) 1,000 guns (b) 30,000 guns (e) 31,000 guns (d) one million vaccines (e) five million vaccines 19. In Table 2.1, opportunity costs (a) Increase as more vaccines are produced (b) A reconstanta...
8. Problems and Applications Q8 Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. U.S. PPF China PPF Quantity of Computers (Millions) HHHHHHHHHH...
14. Problems and Applications Q8 Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts or 10 computers. blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. 30 T 27 U.S PPF China PPF 15 12 U.S. without Trade China without Trade 0 10 20 30...
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