Home Foreigrn MarginalProducts Cheese Wine Labor Force 100 200 g Suppose that the home country consumes...
Home Fareign Cheese Wine Labor Force 100 200 Several questions require drawing graphs. In these cases you should graph carefully, either using graph paper à computer, or if you graph by hand, a ruler to show exact amaunts an the vertical and horizantal axes à. Whith country has an absolute advantage in producing cheese? Which country has an absolute advantage in producing wine? b. Whith country has a comparative advantage in producing cheese? Which country has a comparative advantage in...
Home Foreign Marginal Products Cheese 6 2 Wine 4 3 Labor Force 100 200 a. Suppose the price of wine in the home country before trade is equal to 2. What is the price of cheese? What is the wage? b. Suppose that the relative price of wine after trade is equal to one. Draw the consumption possibilities frontier for both the home country and the foreign country. Again show numerical values for the vertical and horizontal intercepts....
International Economics: Short Answer. Please be kind enough to answer all parts of the question. Partial answers will be downvoted. Point values are in parentheses. II Short Answers. Assume the Use the information below to answer question 1. 1. Ricardian model Each part is worth 2 points Marginal Product of Labor Cheese Wine 2 3 Home Draw the production possibilities frontier, with wine on the Assume that the a. horizontal axis and cheese on the vertical axis. home country labor...
1a. Suppose that each worker in Home can produce 2 pound of cheese or 3 gallons of wine. Assume that Home has 40 workers. a. Graph the production possibilities frontier (PPF) for Home? What is the no-trade relative price of cheese in Home? Why? b. Suppose that each worker in Foreign can produce 1 pounds of cheese or 2 gallons of wine. Assume that Foreign also has 40 workers. Graph the PPF for Foreign? What is the no-trade relative price...
Consider a two countries, Portugal and England, that produce two goods, wine and cheese, with only one factor of production, Labor. In England, one unit of labor can produce 2 units of wine or 1 unit of cheese. In Portugal, one unit of labor can produce 3 units of wine or 1/2 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...
Labor Force Home Foreign Marginal Product of Labor Shirts Apples MPLs = 2 MPLA = 5 MPLs* = 1 MPLA* = 2 L =100 L* = 240 For Questions 9-11 below, assume that the Home and Foreign countries are engaged in free trade. 9. The Foreign country exports apples under free trade. True, Free trade price = .45 and OC is lower for apples 10. The Foreign country's terms-of-trade must be above 2 under free trade. 11. If we know...
Marginal Products Home Foreign Cheese 6 2 Wine 4 3 Labor Force 100 200 k. What effect will the increase in the relative price from 1 to 1.25 have on the foreign country’s utility (increase, decrease or no change)? Explain l. Suppose foreign’s marginal product of labor in producing wine decreases from 3 to 1 due to a disease that is affecting foreign grapes. Sketch the effect that this will have on the world supply curve for wine. Label your...
Home Foreign Marginal Products Cheese 6 2 Wine 4 3 Labor Force 100 200 1.Suppose the relative price of wine increases from 1 to 1.25. Draw the home country’s new consumption possibilities frontier. 2. Suppose foreign’s marginal product of labor in producing wine decreases from 3 to 1 due to a disease that is affecting foreign grapes. Sketch the effect that this will have on the world supply curve for wine. Label your axes and provide numerical values. 3.Sketch...
Answer question 4 based on previous information. 1. Suppose that each worker in the home country can produce three loaves of bread or two shirts. Assume that Home has four workers a. Graph the production possiblities frontier for the Home country. b. What is the no-trade relative price for bread at Home? 2. Suppose that each worker in the Foreign country can produce two loaves of bread or three shirts. Assume that Foreign also has four workers. a. Graph the...
2. Suppose that Home and Foreign consumers have the same preferences over these two goods, and they are represented by the following utility function: U(Q ,Q ) = Q1/3Q2/3. cwcw a. Graph the consumer budget line of the Home country and add indifference curves to the figure. Find the amount of cheese and wine that people in Home country consume in the no-trade equilibrium? b. Graph the consumer budget line of the Foreign country and add indifference curves to the...