Homework Answers
Ans. 1 B) labor is perfectly mobile between industries within a country
In the Ricardian model, it presumes that a single production factor that is labor and labor is perfectly mobile between industries within a country and immobile between countries. Labor can easily reallocate without additional cost between industries within a country but cannot move between countries because of the difference in labor productivity.
Note: in this question in D part might be a printing mistake. there will be answered like between countries in the second portion of answer otherwise this option will also correct if both between industries written. please check.
Ans. 2. A) any product's price must equal its marginal cost
As perfect competition is presumed in the Ricardian model, any product's price must equal its marginal cost because firms are assumed to maximize profit.
Add Answer to:
questions. 1. The Ricardian model presumes a single production factor called "labor." Which of the following...
1. An increase in the supply of labor, the variable factor of production, will cause a monopsonist's: a. marginal revenue product curve to shift up b. marginal revenue product curve to shift...
1. An increase in the supply of labor, the variable factor of production, will cause a monopsonist's: a. marginal revenue product curve to shift up b. marginal revenue product curve to shift down arginal factor cost curve to shift up marginal factor cost curve to shift down ARP e. both "a" and "c" are correct answers f. both "b" and "c" are correct answers g. both "a" and "d" are correct answers h. both "b" and "d" are correct answers...
Assume a standard trade model. Which of the following statements is NOT true? a) At the...
Assume a standard trade model. Which of the following statements is NOT true? a) At the optimal output mix, the slope of the production possibility frontier equals the negative relative price. b) If the economy produces more of one good, it has to produce less of the other good. c) The production possibility frontier is convex. d) The optimal output mix is realized where the isovalue line is tangent to the production possibility frontier. Assume a firm faces the following...
1. Given the information in Table 1, in a two country and two-product Ricardian model, which...
1. Given the information in Table 1, in a two country and two-product Ricardian model, which of the following statements is (are) true? Table 1 Unit Labour Requirements T-shirt Brandy 4 hours 12 hours 6 hours 12 hours United States France A) The pretrade price ratio in France is 1 brandy - 2 T-shirts. B) The US pretrade price ratio is 1 brandy - 4 T-shirts. C) The US pretrade price ratio is 1 T-shirt = 1/3 brandy. D) The...
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land...
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land (T Home can produce cloth (Qc) with labor and capital, while producing food (QF) with labor and land. In this economy, labor is a mobile factor between the cloth and food industries. In contrast, capital is specific to the cloth industry, while land is specific to the food industry. Home's utility function, cloth production function, food production function are, respectively, given by U(Dc, Dr)...
1 (Specific Factor Model, Chapter 3) In the simple" version of the specific factor model, there...
1. (Specific Factor Model, Chapter 3) In the "simple" version of the specific factor model, there are two sectors (goods), one factor (labor) that is perfectly mobile between the two sectors, and one fixed - or specific - factor in each sector. To be concrete, suppose the two goods are food and clothing, the specific factor in food is "land" - represented by "T", and the specific factor in clothing is "capital", represented by "K'. The production functions for each...
Consider a Ricardian model. There are two countries called Australia and New Zealand and two goods called beer and chees...
Consider a Ricardian model. There are two countries called Australia and New Zealand and two goods called beer and cheese. In Australia the unit labour requirement for a beer is 10 hours and for a cheese is 10 hours. In New Zealand the unit labour requirement for a beer is 4 hour and for a cheese is 1 hour. Australia has an endowment of 2000 hours of labour. New Zealand has an endowment of 400 hours of labour. 1 Draw...
Consider two countries that produce cloth and widgets with labour as the unique production factor using...
Consider two countries that produce cloth and widgets with labour as the unique production factor using a linear technology. Given the following information: Unit Produced by One Worker/Hour Cloth Widgets Home 200 400 Foreign 120 60 i. What is the opportunity cost of cloth in terms of widgets for the Home country? For the Foreign country? (5 points) ii. In which good does the Home country have comparative advantage? Why? (5 points) ii. Assume that on the world market one...
1. Do you agree or disagree with the following statements a. Balanced trade is the difference...
1. Do you agree or disagree with the following statements a. Balanced trade is the difference between exports and imports b. If country A can out produce country B, then country A has no reason to trade c. Every country in the world experiences free trade d. There is no connection between Foreign direct investment and trade flows e. An accurate way to measure imports is to assign the value of a final good 2. Trade distortion effects increase estimates...
1-Home produces 2 goods X and Y . Home country has two factors of production, Labor...
1-Home produces 2 goods X and Y . Home country has two factors of production, Labor and Capital. All consumers at Home have preferences over two goods that can be represented by the utility function U(X,) =XY . The factor requirements per unit of output of the two goods are also fixed and they are shown in the following table: Good X Good Y Labour 1/3 2/3 Capital 2/3 1/3 Home country has 360 units of Labour and 600 units...
Question 1 (6 points) Which of the following is true? A) David Ricardo proposed the theory...
Question 1 (6 points) Which of the following is true? A) David Ricardo proposed the theory of absolute advantage as the basis for trade. B) Absolute advantage is based on comparing the opportunity costs of trading partners. C) The Ricardian model assumes labor is perfectly mobile. D) Adam Smith proposed the theory of comparative advantage as the basis for trade in The Wealth of Nations Question 2 (6 points) Answer the question(s) below based on the information in the following...
1. An increase in the supply of labor, the variable factor of production, will cause a monopsonist's: a. marginal revenue product curve to shift up b. marginal revenue product curve to shift down arginal factor cost curve to shift up marginal factor cost curve to shift down ARP e. both "a" and "c" are correct answers f. both "b" and "c" are correct answers g. both "a" and "d" are correct answers h. both "b" and "d" are correct answers...
1. Given the information in Table 1, in a two country and two-product Ricardian model, which of the following statements is (are) true? Table 1 Unit Labour Requirements T-shirt Brandy 4 hours 12 hours 6 hours 12 hours United States France A) The pretrade price ratio in France is 1 brandy - 2 T-shirts. B) The US pretrade price ratio is 1 brandy - 4 T-shirts. C) The US pretrade price ratio is 1 T-shirt = 1/3 brandy. D) The...
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land (T Home can produce cloth (Qc) with labor and capital, while producing food (QF) with labor and land. In this economy, labor is a mobile factor between the cloth and food industries. In contrast, capital is specific to the cloth industry, while land is specific to the food industry. Home's utility function, cloth production function, food production function are, respectively, given by U(Dc, Dr)...
Consider two countries that produce cloth and widgets with labour as the unique production factor using a linear technology. Given the following information: Unit Produced by One Worker/Hour Cloth Widgets Home 200 400 Foreign 120 60 i. What is the opportunity cost of cloth in terms of widgets for the Home country? For the Foreign country? (5 points) ii. In which good does the Home country have comparative advantage? Why? (5 points) ii. Assume that on the world market one...
Question 1 (6 points) Which of the following is true? A) David Ricardo proposed the theory of absolute advantage as the basis for trade. B) Absolute advantage is based on comparing the opportunity costs of trading partners. C) The Ricardian model assumes labor is perfectly mobile. D) Adam Smith proposed the theory of comparative advantage as the basis for trade in The Wealth of Nations Question 2 (6 points) Answer the question(s) below based on the information in the following...
Most questions answered within 3 hours.
-
How much is the
multiplier?. Here are some facts about the economy of Inferior.
Marginal propensity...
asked 42 seconds ago -
What’s the allocation of the purchase price between newmont merger
goldcorp?
And does the merger adhere...
asked 18 seconds ago -
I am getting an error that the variable num was not declared in
the scope on...
asked 1 minute ago -
Twenty students took a test. The average grade was 86 with a
standard deviation of 9....
asked 4 minutes ago -
Peroxyacetyl Nitrate (PAN) is formed by addition of NO2
to the corresponding peroxyacetyl radical. PAN is...
asked 4 minutes ago -
Suppose that at a large university 30% of students are involved
in intramural sports. If we...
asked 13 minutes ago -
Answer items 7 and 8 from the following information:
The mean for VO2max is 50 ml/kg/min...
asked 13 minutes ago -
The formation factor of a rock sample is 50. Calculate the
porosity if the sample is;...
asked 15 minutes ago -
If the anion in an insoluble salt is a conjugate base of a weak
acid, will...
asked 20 minutes ago -
2. The East Street Bagel Shop has a weekly demand for 3,500
bagels, which they make...
asked 36 minutes ago -
The purpose of this study was to
assess the vitamin D status of pregnant women residing...
asked 37 minutes ago -
Please answer each question in 150 words, from the eyes of
someone in the hospitality/hotel field...
asked 43 minutes ago