2) a) India is labour abondand and canada is capital abondant country.
b) Handmade rugs are labour intensive and robots are capital intensive indutries.
c)
2. This problem uses the Heckscher-Ohlin model to predict the direction of trade. Consider the production...
1. This problem uses the Heckscher-Ohlin model to predict the direction of trade. Consider the production of handmade rugs and assembly line robots in Canada and India. a. Which country would you expect to be relatively labor-abundant, and which is capital-abundant? Why? b. Which industry would you expect to be relatively labor-intensive, and which is capital-intensive? Why? c. Given your answers to (a) and (b), draw production possibilities frontiers for each country. Assuming that consumer preferences are the same in...
2. Use the Heckscher-Ohlin model to consider the production of hand-made pottery and silicon microchips in the UK and India. (a) Which country would you expect to be relatively labor abundant, and which relatively capital abundant? Why? (b) Which industry would you expect to be relatively labor intensive, and which capital intensive? Why? (c) Given your answers to (a) and (b), draw PPFs for each country. Assuming preferences are the same, add indifference curves and relative autarky price lines. What...
Countries measure the health of their economies in many ways such as unemployment rates, consumer confidence, and Gross Domestic Product (GDP). Gross Domestic Product is a measurement of the amount of goods produced by a country in one year. If that number increases, our economy is growing, whereas a decrease would indicate a shrinking economy. To calculate expenditure GDP we add up all of the groups who buy goods in the economy (GDP = C + I + G +...
Thank you so much. Heckscher-Ohlin Model 2. There are two countries, Home and Foreign. There are two goods: beer (6) and corn (C), which are produced in both countries using capital (K) and labor (L). In both countries, it takes 2 units of labor and 1 unit of capital to make beer (a Lb = 2, akb = 1); and it takes 5 units of labor and 5 units of capital to make corn (ale = 5, ako = 5)....
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...
QUESTION CONTEXT: Kenya's flying vegetables (and flowers) GlobalPost September 07, 2009 · 1:26 PM UTC By Katrina Manson LONDON — Kenya's exports of 450,000 tons of vegetables, fruit and flowers to Britain and European markets have become the East African country's fastest growing economic sector. “Kenyan horticulture will bring in $1.3 billion this year. It’s come from nowhere in 20 years and receives absolutely no subsidy of any kind and yet it’s bigger already than banking, tourism and even telecommunication,”...