The specific factors model. Consider the Ivory Tower “economy” with its two sectors, fuzzy and techy....
The specific factors model. Consider the Ivory Tower “economy” with its two sectors, fuzzy and techy. Each has its own specific factor, fuzzy and techy field professors. The mobile factor are the students who can work in either field.
(a) In an appropriate diagram, show how many students work in each field. Also indicate what areas in your diagram represent the income of each of the groups involved.
(b) The price of techy research decreases because of the general economic malaise. How does this affect the allocation of students across sectors and the real income of the professors (fuzzy and techy types)? What about the students?
(c) Assume now that the fuzzy sector has experienced technological progress, while everything else has not changed. How does this affect the alloca- tion of students across sectors? What about the real income of the various groups involved?
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The specific factors model. Consider the Ivory Tower “economy”
with its two sectors, fuzzy and techy....
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...
In the two-sector (manufacturing and agriculture) specific-factors model, an increase in the price of the manufactured...
In the two-sector (manufacturing and agriculture) specific-factors model, an increase in the price of the manufactured good will cause: A) a decrease in nominal wages in both the agricultural and manufacturing sectors. B) an increase in real wages in both the agricultural and manufacturing sectors. C) an increase in both nominal and real wages in both the agricultural and manufacturing sectors. D) an increase in nominal wages in both the agricultural and manufacturing sectors. Which statement below is correct? A)...
The specific factors model 1) Consider a family of farmers. Grandma owns the machinery necessary to...
The specific factors model
1) Consider a family of farmers. Grandma owns the machinery
necessary to produce corn, while Grandpa owns the machinery
necessary to produce soybeans. Their children carry out the work
required to produce both corn and soybeans. Assume that production
functions for the two goods are concave in labor.
(a) Starting with the profit maximizing condition w = P × M P L,
derive the diagram we have introduced in class. In the diagram,
show the areas...
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) ...
True or False, only answer part c is fine
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) and three factors (mobile labor, fixed capital in C, and fixed land in F). Except otherwise noted, assume that every factor has the same preferences for C and F. Under free trade, the economy exports F. (a) As the home country opens up from autarky to trade, the opportunity cost of F in...
1 (15 points). Consider a 2x3 specific-factors model, with al l associated assumptions, where Home is...
1 (15 points). Consider a 2x3 specific-factors model, with al l associated assumptions, where Home is a small country and has two sectors, (G) light manufactur is specific to light manufacturers) and (ii) skilled labor (which is specific to (a) If the unskilled laborers actors, () capital (which is mobile between sectors), () unskilled labor (which industrial goods). express a strong preference against free trade, what does this suggest about Home's comparative advantage? Explain. (b) If, as a result what...
A depicts production and consumption in a closed economy with labor-intensive Wheat and capital- intensive Cloth. Capital and labor are both perfectly mobile across sectors CHOS model). Read all...
A depicts production and consumption in a closed economy with labor-intensive Wheat and capital- intensive Cloth. Capital and labor are both perfectly mobile across sectors CHOS model). Read all the questions, think carefully and plan your answer before drawing Cloch Wheat (i.e. the Suppose the country opens to trade and this leads to an increase in domestic relative price of wheat rises to now equal the world relative price of wheat). a) Assume actors in the economy respond to the...
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...
Read the case study and answer the questions in the end. Towards a diversified knowledge economy...
Read the case study and answer the questions in the end. Towards a diversified knowledge economy ECONOMIC DVERSIFICATION DRIVES GROWTH IN THE UAE UAE expects higher non oil growth in 2018 due to diversified economy 3.5 70 TOP COUNTRY Source www.putees.co sF KY ScroRs 100 MLLION 25 240 5 200 30 Diversification is important to promote economic development, to create job opportunities for a rapidly growing local workforce, but also to reduce or spread the risk of a high economic...
Decision Making Technology at UPS Regardless of the specific decisions a manager makes, the decision-making process...
Decision Making Technology at UPS Regardless of the specific decisions a manager makes, the decision-making process is either programmed or nonprogrammed. Programmed decision making is a routine, virtually automatic process. Programmed decisions are ones that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur. In programmed decision making, managers do not need to repeatedly make new judgments about what should be done. They can rely...
Organizing Siemens for Global Competitiveness The German company Siemens is one of the world’s great engineering...
Organizing Siemens for Global Competitiveness The German company Siemens is one of the world’s great engineering conglomerates manufacturing everything from hearing aids and medical scanners to giant power generation turbines, wind systems, and locomotives. By the late 2000s, however, Siemens was struggling with subpar performance relative to its global rivals such as General Electric (GE), Honeywell, and United Technologies. In July 2007, Siemens hired Peter Löscher as CEO, replacing Klaus Kleinfeld, and gave him the task of trying to revitalize...
The specific factors model
1) Consider a family of farmers. Grandma owns the machinery
necessary to produce corn, while Grandpa owns the machinery
necessary to produce soybeans. Their children carry out the work
required to produce both corn and soybeans. Assume that production
functions for the two goods are concave in labor.
(a) Starting with the profit maximizing condition w = P × M P L,
derive the diagram we have introduced in class. In the diagram,
show the areas...
True or False, only answer part c is fine
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) and three factors (mobile labor, fixed capital in C, and fixed land in F). Except otherwise noted, assume that every factor has the same preferences for C and F. Under free trade, the economy exports F. (a) As the home country opens up from autarky to trade, the opportunity cost of F in...
1 (15 points). Consider a 2x3 specific-factors model, with al l associated assumptions, where Home is a small country and has two sectors, (G) light manufactur is specific to light manufacturers) and (ii) skilled labor (which is specific to (a) If the unskilled laborers actors, () capital (which is mobile between sectors), () unskilled labor (which industrial goods). express a strong preference against free trade, what does this suggest about Home's comparative advantage? Explain. (b) If, as a result what...
A depicts production and consumption in a closed economy with labor-intensive Wheat and capital- intensive Cloth. Capital and labor are both perfectly mobile across sectors CHOS model). Read all the questions, think carefully and plan your answer before drawing Cloch Wheat (i.e. the Suppose the country opens to trade and this leads to an increase in domestic relative price of wheat rises to now equal the world relative price of wheat). a) Assume actors in the economy respond to the...
Read the case study and answer the questions in the end. Towards a diversified knowledge economy ECONOMIC DVERSIFICATION DRIVES GROWTH IN THE UAE UAE expects higher non oil growth in 2018 due to diversified economy 3.5 70 TOP COUNTRY Source www.putees.co sF KY ScroRs 100 MLLION 25 240 5 200 30 Diversification is important to promote economic development, to create job opportunities for a rapidly growing local workforce, but also to reduce or spread the risk of a high economic...
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