Homework Answers
15) Different tastes, preferences, technologies and relative factor endowments, all contribute to a basis for trade between two countries. Thus, the correct option is:
(d) different absolute factor endowments but the same relative endowments.
16) (a) greater than; X
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15. Which of the following does not contribute to a basis for trade between two countries?...
17. In the following graph showing indifference curves for country A (a) and for country B...
17. In the following graph showing indifference curves for country A (a) and for country B (b) in a situation where both countries have the same production possibilities frontier, in autarky, Px/Py in country A is Px/Py in country B, and, if trade begins, country A will export good good Y sood X a. less than; X b. less than; Y c. greater than; X d. greater than; Y 18. Given the following diagram showing a fixed-quantity production-possibilities frontier, a...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade takes place in accordance with the Heckscher-Ohlin theorem, what would be the consequence for factor prices (w/r) in the two countries? a. (w/r) rises in A and falls in B b. (w/r) rises in A and also rises in B c. (w/r) falls in A and rises in B d. (w/r) falls in A and also falls in B 48. Which one of the...
If country A's (Px/Pv) in autarky is greater than the (Px/Py) on the world market, then,...
If country A's (Px/Pv) in autarky is greater than the (Px/Py) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A's producers will , and A's producers will hence want to shift their production toward producing 25. a. decrease; more of good X and less of good Y b. decrease; more of good Y and less of good X c. increase; more of good X and less of good...
1. (Endowment Economies) When will countries trade? Assuming 2 goods, food and clothing, and two countries...
1. (Endowment Economies) When will countries trade? Assuming 2 goods, food and clothing, and two countries with homothetic preferences, determine whether these two countries will trade in each of the following situations (a) Countries have identical preferences and identical endowments (b) Countries have identical preferences, their endowments differ, and their endow- ments are not in the same ratio of food to clothing (c) Countries have identical preferences, their endowments differ, but the ratio of food to clothin is the same...
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 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...
Which country exports good X, which country imports good X? Explain Mark is the relative price...
Which country exports good X, which country imports good X?
Explain
Mark is the relative price line for country A and country B in
the graph before trade.
At Autarky (pre-trade), which point represents production point
for country A? Which point represent consumption point for country
A?
At Autarky (pre-trade), which point represents production point
for country B? Which point represent consumption point for country
B?
With free trade, which point represents production point for
country A? Which point represent...
21. In the neoclassical model of trade, the movement of a country from autarky to free...
21. In the neoclassical model of trade, the movement of a country from autarky to free trade generally results in specialization in production, the situation in the Classical model. a. complete; unlike b. complete; as was also c. partial; unlike d. partial; as was also 22. If two countries have identical production-possibilities frontiers but different tastes, it is possible for each country to gain from trade with the other country a. in the Classical model but not in the neoclassical...
Consider a world with two countries, Home and Foreign, both able to produce two goods: cloth and tablet computers. The p...
Consider a world with two countries, Home and Foreign, both able to produce two goods: cloth and tablet computers. The production of both goods uses capital and labor in fixed proportions, with the tablets industry using more capital per worker than the cloth industry. The units of each input needed to produce one unit output are given by: capital Labor Cloth 1 2 Tablets 2 1 Both countries have 150 units of capital available for production, but the Home country...
PROBLEM 1 Consider the typical HO setting: 2 countries, the United States and Canada, produce two goods,...
PROBLEM 1 Consider the typical HO setting: 2 countries, the United States and Canada, produce two goods, maiz (corn) and cloth, with two factors, land and labor. Both countries share the same tastes and the same technology. Maiz production is land intensive, and therefore cloth production is labor intensive. Furthermore, resource endowments are as follows: in the US there are 100 units of labor and 100 of land, in Canada there are 60 units of labor and 90 of land. Which...
17. In the following graph showing indifference curves for country A (a) and for country B (b) in a situation where both countries have the same production possibilities frontier, in autarky, Px/Py in country A is Px/Py in country B, and, if trade begins, country A will export good good Y sood X a. less than; X b. less than; Y c. greater than; X d. greater than; Y 18. Given the following diagram showing a fixed-quantity production-possibilities frontier, a...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade takes place in accordance with the Heckscher-Ohlin theorem, what would be the consequence for factor prices (w/r) in the two countries? a. (w/r) rises in A and falls in B b. (w/r) rises in A and also rises in B c. (w/r) falls in A and rises in B d. (w/r) falls in A and also falls in B 48. Which one of the...
If country A's (Px/Pv) in autarky is greater than the (Px/Py) on the world market, then, as the country moves from autarky to trade, the relative price of good X facing A's producers will , and A's producers will hence want to shift their production toward producing 25. a. decrease; more of good X and less of good Y b. decrease; more of good Y and less of good X c. increase; more of good X and less of good...
1. (Endowment Economies) When will countries trade? Assuming 2 goods, food and clothing, and two countries with homothetic preferences, determine whether these two countries will trade in each of the following situations (a) Countries have identical preferences and identical endowments (b) Countries have identical preferences, their endowments differ, and their endow- ments are not in the same ratio of food to clothing (c) Countries have identical preferences, their endowments differ, but the ratio of food to clothin is the same...
Which country exports good X, which country imports good X?
Explain
Mark is the relative price line for country A and country B in
the graph before trade.
At Autarky (pre-trade), which point represents production point
for country A? Which point represent consumption point for country
A?
At Autarky (pre-trade), which point represents production point
for country B? Which point represent consumption point for country
B?
With free trade, which point represents production point for
country A? Which point represent...
21. In the neoclassical model of trade, the movement of a country from autarky to free trade generally results in specialization in production, the situation in the Classical model. a. complete; unlike b. complete; as was also c. partial; unlike d. partial; as was also 22. If two countries have identical production-possibilities frontiers but different tastes, it is possible for each country to gain from trade with the other country a. in the Classical model but not in the neoclassical...
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