Consider a general model of Ricardian trade with 2 countries
(Home and Foreign) and 2 goods (Clothing and Food): unit labor
costs are aLC and aLF in Home and a∗LC and a∗LF in Foreign. Home
and Foreign are endowed, respectively, with L and L∗ units of
labor. Workers in both countries have the same preferences
represented by a Cobb-Douglas utility function:
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Consider a general model of Ricardian trade with 2 countries
(Home and Foreign) and 2 goods...
2. (Ricardian Model) Two agricultural economies, "Home and "Foreign" produce corın (C) and wheat (W). Home...
2. (Ricardian Model) Two agricultural economies, "Home and "Foreign" produce corın (C) and wheat (W). Home has an endowment of 200 fields, each of which can produce either 2 units of corn or 2 units of wheat. Foreign has an endowment of 300 fields, each of which can produce either 1 unit of con or 2 units of wheat. Consus in both economies have identical homothetic preferences represented by the utility function: (a) Draw the production possibility frontiers for both...
This question relates to the Ricardian Trade Model. Suppose costs of production depend only on labor...
This question relates to the Ricardian Trade Model. Suppose costs of production depend only on labor costs, and that to produce a unit of each commodity in each country takes the number of labor hours shown. Good aLi aLi* Wheat 2 2 Soybeans 3 5 Cotton 2 4 Avocados 6 4 Percorino (Cheese) 12 3 a. Suppose the wage ratio, w/w* = 1.25. Which goods does the home country produce? Which goods does the foreign country produce? Explain clearly how...
Answer questions 1 and 10 based on a global economy of two Ricardian economies (Home, Foreign)...
Answer questions 1 and 10 based on a global economy of two Ricardian economies (Home, Foreign) whose industry technologies are given in the following table Product Home Foreign aLX = 0.5 0.5 Table 1: Labor hours per unit of outputs Each of these two economies is endowed with 500 labor hours (i.e. L- L*-500) 8. Again, suppose that both Home and Foreign move from autarky to a free-trade regime and that the trade price of product X is 0.4Y. If...
In the traditional Heckscher-Ohlin model, the two countries differ in: Select one: O a. Technology O...
In the traditional Heckscher-Ohlin model, the two countries differ in: Select one: O a. Technology O b. Their preferences for cloth and food. O c. Capital productivity. d. Relative abundance of production factors. Assume that two countries, Home and Foreign, are endowed with the following production factors. Countries Factor Endowments Home Foreign Labor (L) 9040 Capital (K) 30 20 Assume that food is capital-intensive and cloth is labor-intensive. Following the Heckscher-Ohlin Theory Select one: A. Foreign will export food. B....
This exercise applies the basic Ricardian model of one factor and two goods. The table below...
This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the unit labor requirements in Foreign and Home for each of two goods Candy alc - 1 hour per pound aLC = 5 hours per pound Whiskey a w 3 hours per gallon a4 hours per gallon Home Foreign LW where alc - number of labor hours needed to produce a unit of candy in Home aLw = number of labor hours needed...
In the Ricardian model with a continuum of goods (Dornbusch et al), an increase in the relative s...
In the Ricardian model with a continuum of goods (Dornbusch et al), an increase in the relative size of the foreign country's labor force will: a. raise the foreign wage and reduce the range of goods produced in Foreign. b. raise the home relative wage and expand the range of goods produced in Foreign c. have no effect on the pattern of trade d. expand the range of goods produced at home In the 2-factor (labor and capital), 2 good...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work out the effects of the following changes (one at a time) on the Home and Foreign terms of trade and welfare. Assume that two goods, Food and Cloth, are produced and consumed, Home country has a comparative advantage in Food, and that in the initial equilibrium, both countries specialize completely. Assume that preferences are identical and homothetic in the two countries. (a) A decrease...
Thank you so much. Heckscher-Ohlin Model 2. There are two countries, Home and Foreign. There are...
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)....
Suppose there exist 2 countries, Home and Foreign; 2 goods, X and Y; and 2 factors...
Suppose there exist 2 countries, Home and Foreign; 2 goods, X and Y; and 2 factors of production, labor (L) and capital (K). Each country can produce both goods. X is labor-intensive and Y is capital-intensive. Home is labor-abundant and Foreign is capital-abundant. Assume that the standard assumptions of the Heckscher-Ohlin model hold. When answering the following question, please support each of your arguments with detailed analysis and draw the relevant diagrams to support your answer. Consider a move from...
Assume that we are in a Heckscher Ohlin world: 2 Two countries: Home (H) and Foreign...
Assume that we are in a Heckscher Ohlin world: 2 Two countries: Home (H) and Foreign (F), 2 Factors: Capital (K) and Labor (L), 2 Goods: Cloth (C) and Food (F). Home: The Labor (L) and Capital (K) used to produce Cloth and Food are: aKC=2, aLC=2, aKF=3, aLF=1. Home Endowments are: K=1,500 units of machine hours, L=1,000 units of work hours. Based on the description of the problem, what amount of food does the home country produce? What amount...
2. (Ricardian Model) Two agricultural economies, "Home and "Foreign" produce corın (C) and wheat (W). Home has an endowment of 200 fields, each of which can produce either 2 units of corn or 2 units of wheat. Foreign has an endowment of 300 fields, each of which can produce either 1 unit of con or 2 units of wheat. Consus in both economies have identical homothetic preferences represented by the utility function: (a) Draw the production possibility frontiers for both...
Answer questions 1 and 10 based on a global economy of two Ricardian economies (Home, Foreign) whose industry technologies are given in the following table Product Home Foreign aLX = 0.5 0.5 Table 1: Labor hours per unit of outputs Each of these two economies is endowed with 500 labor hours (i.e. L- L*-500) 8. Again, suppose that both Home and Foreign move from autarky to a free-trade regime and that the trade price of product X is 0.4Y. If...
In the traditional Heckscher-Ohlin model, the two countries differ in: Select one: O a. Technology O b. Their preferences for cloth and food. O c. Capital productivity. d. Relative abundance of production factors. Assume that two countries, Home and Foreign, are endowed with the following production factors. Countries Factor Endowments Home Foreign Labor (L) 9040 Capital (K) 30 20 Assume that food is capital-intensive and cloth is labor-intensive. Following the Heckscher-Ohlin Theory Select one: A. Foreign will export food. B....
This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the unit labor requirements in Foreign and Home for each of two goods Candy alc - 1 hour per pound aLC = 5 hours per pound Whiskey a w 3 hours per gallon a4 hours per gallon Home Foreign LW where alc - number of labor hours needed to produce a unit of candy in Home aLw = number of labor hours needed...
In the Ricardian model with a continuum of goods (Dornbusch et al), an increase in the relative size of the foreign country's labor force will: a. raise the foreign wage and reduce the range of goods produced in Foreign. b. raise the home relative wage and expand the range of goods produced in Foreign c. have no effect on the pattern of trade d. expand the range of goods produced at home In the 2-factor (labor and capital), 2 good...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work out the effects of the following changes (one at a time) on the Home and Foreign terms of trade and welfare. Assume that two goods, Food and Cloth, are produced and consumed, Home country has a comparative advantage in Food, and that in the initial equilibrium, both countries specialize completely. Assume that preferences are identical and homothetic in the two countries. (a) A decrease...
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)....
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