Homework Answers
This statement is false
The impact on workers who are common in both the the industries is generally ambiguous. More specifically, there is a common factor in specific factor model where that factor operates in both the industries where different specific factors are also involved. According to the model, when there is a change in the relative price due to opening up of trade, specific factors gain in respective countries but the effect on common factor is ambiguous.
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2. 10 pts True or False, In the specific factors model, when a country opens up...
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...
Consider a specific factors model in which capital is specific to manufacturing and land is specific...
Consider a specific factors model in which capital is specific to manufacturing and land is specific to agriculture. If a country has a comparative advantage in manufacturing output, then when it opens to trade owners of land will be ---- off because the marginal product of land will ----. A better; rise B better; fall C worse; rise D worse; fall
Consider a 2x3 specific-factors model, with all associated assumptions, where HOME is a small cou...
Consider a 2x3 specific-factors model, with all associated assumptions, where HOME is a small country and has two sectors, (1) light manufactured goods and (2) industrial goods, and three factors, (i) capital (which is mobile between sectors), (ii) unskilled labor (which is specific to light manufactures) and (iii) skilled labor (which is specific to industrial goods). (a) If the unskilled laborers express a strong preference against free trade, what does this suggest about HOME’s comparative advantage? Explain. (b) If, as...
Verizon LTE 33% 10:25 PM Question 2 Trade and factor returns Unanswered Consider a specific factors...
Verizon LTE 33% 10:25 PM Question 2 Trade and factor returns Unanswered Consider a specific factors model in which capital is specific to manufacturing and land is specific to agriculture. If a country has a comparative advantage in manufacturing output, then when it opens to trade owners of land will beoff because the marginal product of land will . A better, rise B better; fall C worse; rise D worse; fall Unanswered
True or False? Explain your answer. 1. If a Chinese business buys a Tesla car, this...
True or False? Explain your answer. 1. If a Chinese business buys a Tesla car, this would be an example of foreign direct investment inflow for the US. 2. In the presence of external economies of scale, trade will unambiguously improve welfare in the exporting country and worsen welfare in the importing country.
True or False? Explain your answer. In the presence of dynamic increasing returns, a country can...
True or False? Explain your answer. In the presence of dynamic increasing returns, a country can be potentially better-off by closing its borders to international trade. According to Standard Trade model, imposing a tariff will always make a country better off.
for mobile factors, for fixed factors used to 33) In the specific factors model, the effects...
for mobile factors, for fixed factors used to 33) In the specific factors model, the effects of trade on welfare are for fixed factors used to produce the exported good, and produce the imported good. A) ambiguous; positive; negative B) positive; positive; positive C) ambiguous; negative; positive D) positive; ambiguous; ambiguous E) negative; ambiguous; ambiguous 34) The overall welfare effects of trade are A) positive; the domestic economy grows faster than do foreign eco b) positive; more people gain from...
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...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods to foreign country. Use the following information to answer the questions below: Manufacturing: Sales revenue Pm x Qm = 150 Payments to labor = W x Lm = 100 Payments to capital = Rkx K = 50 Sales revenue Pax Qa 150 Payments to labor W x La 50 Agriculture: Rt x T 100 Payments to land Holding the price of agriculture constant, suppose...
Verizon LTE 33% 10:25 PM Question 2 Trade and production in the specific factors model Unanswered...
Verizon LTE 33% 10:25 PM Question 2 Trade and production in the specific factors model Unanswered In autarky, the opportunity cost of wine in the U.S. is 4 beers and in Mexico is 8 beers. If there are increasing opportunity costs (as in the specific factors model), then after opening to trade the U.S. wil A fully specialize in and export wine. B fully specialize in and export beer. C produce both goods and export wine. D produce both goods...
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...
Verizon LTE 33% 10:25 PM Question 2 Trade and factor returns Unanswered Consider a specific factors model in which capital is specific to manufacturing and land is specific to agriculture. If a country has a comparative advantage in manufacturing output, then when it opens to trade owners of land will beoff because the marginal product of land will . A better, rise B better; fall C worse; rise D worse; fall Unanswered
for mobile factors, for fixed factors used to 33) In the specific factors model, the effects of trade on welfare are for fixed factors used to produce the exported good, and produce the imported good. A) ambiguous; positive; negative B) positive; positive; positive C) ambiguous; negative; positive D) positive; ambiguous; ambiguous E) negative; ambiguous; ambiguous 34) The overall welfare effects of trade are A) positive; the domestic economy grows faster than do foreign eco b) positive; more people gain from...
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...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods to foreign country. Use the following information to answer the questions below: Manufacturing: Sales revenue Pm x Qm = 150 Payments to labor = W x Lm = 100 Payments to capital = Rkx K = 50 Sales revenue Pax Qa 150 Payments to labor W x La 50 Agriculture: Rt x T 100 Payments to land Holding the price of agriculture constant, suppose...
Verizon LTE 33% 10:25 PM Question 2 Trade and production in the specific factors model Unanswered In autarky, the opportunity cost of wine in the U.S. is 4 beers and in Mexico is 8 beers. If there are increasing opportunity costs (as in the specific factors model), then after opening to trade the U.S. wil A fully specialize in and export wine. B fully specialize in and export beer. C produce both goods and export wine. D produce both goods...
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