2. Use the Heckscher-Ohlin model to consider the production of hand-made pottery and silicon microchips in...
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. 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 rela- tively labor-abundant, and which is capital- abundant? Why? b. Which industry would you expect to be rel- atively labor-intensive, and which is capital- intensive? Why? c. Given your answers to (a) and (b), draw production possibilities frontiers for each country. Assurning that consumer preferences...
will have a production possibility In the Heckscher-Ohlin model, the country with the relative abundance of frontier that is biased toward the production of the good. Select one: O A. land; labor intensive O B. land; capital intensive C. labor; capital intensive O D. labor; labor intensive In the Heckscher-Ohlin, gains from international trade come from Select one: A. the increased wages. O B. the improvement in technology. C. the increasing on the consumption choices available to consumers. D. the...
2. Answer the following question under the assumptions of the Heckscher-Ohlin model. There are two industries of production: clothing (Qd) and food (Qr). Clothing is capital-intensive and food is labor-intensive. There are two countries: Home and Foreign. Home is capital abundant and Foreign is labor abundant. (Same as in class) a. Draw a "box" graph that represents the labor and capital inputs into each industry in Home b. What do the slopes of the lines drawn in part (a) represent?...
In the 2-factor, 2 good Heckscher-Ohlin model, a change from autarky (no trade) to trade will benefit the owners of: capital the relatively abundant factor of production labor the relatively inelastic factor of production
Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country His relatively labor abundant, then once trade begins: c. wage/rent ratio rises in H wage/rent ratio falls in H wage/rent ratio remains constant in H. None of the above.
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...
These questions are about international trade. I want to know the answers. 5 Heckscher-Ohlin Model. Suppose the production of cloth is labour intensive and the production of food is land intensive and suppose the United States (US) is labour abundant and Canada is land abundant. (a) Show how the US production possibility frontier (PPF) differs from the Canadian PPF. Briefly explain. (Use the general version of the PPF's) (b) Which country will have the lower price of cloth Pc relative...
Heckscher-Ohlin model Country A produces cellphone (C) and food (F) with capital and labor. Both sectors are perfect competitive. Capital (K) and labor (L) are not substitutable with each other. Thus, unit capital requirement and unit labor requirement are fixed. ??? = 3, ??? = 1, ??? = 2, ??? = 4, where ??? is the number of units of K-capital required to produce and unit of C-cellphone. a. Which sector is relatively capital intensive? Which sector is relatively labor...
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)....