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In the H-O model, when Home and Foreign trade, the relative goods prices converge in the...
Consider a general model of Ricardian trade with 2 countries (Home and Foreign) and 2 goods...
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:
Consider a general model of Ricardian trade with 2 countries (Home and Foreign) and 2 goods (Clothing and Food):...
P.S: (3）is the world relative price =3 There are two countries, Home and Foreign. The two...
P.S: (3）is the world relative price =3
There are two countries, Home and Foreign. The two countries can produce two goods, socks (S) and hats (H) using only labour. The labour stock in Home is L = 600 and the labour stock in Foreign is L* = 300. The unit labour requirements for socks and hats are as = 2 and au = 4 for Home and as = 1 and ay = 5 for Foreign. - 1. Assume that...
The Heckscher–Ohlin model. Home and Foreign have two production factors, skilled and unskilled labor and produce...
The Heckscher–Ohlin model. Home and Foreign have two production factors, skilled and unskilled labor and produce two goods, textiles and computers. Home is skilled labor abundant, and computers are skilled labor intensive. Starting from a situation of autarky, the two countries liberalize trade. Assuming that the two countries produce both goods before and after trade liberalization, answer the following questions: (a) What is the effect of trade liberalization on the relative price of computers at Home and in Foreign? (b)...
5- (Table: Home and Foreign Prices for Manufacturing and Agriculture) Consider the information provided about the price...
5- (Table: Home and Foreign Prices for Manufacturing and Agriculture) Consider the information provided about the price of agriculture and manufacturing goods in two countries (Home and Foreign). If the two countries open their markets for trade, then Home Foreign S5 S3 S7 Pa S3 Pa A) Home has the comparative advantage in agriculture. B) Home has the comparative advantage in manufacturing. C) Foreign has absolute advantage in both goods. D) Foreign has a comparative advantage in manufacturing.
5- (Table:...
The standard trade model. Home and Foreign have two factors of production, land and labor, with...
The standard trade model. Home and Foreign have two factors of production, land and labor, with which they produce two goods, wheat and wine. Technology is the same in the two countries. Wheat is land intensive, and Home is land abundant. Graphically analyze the effects on the terms of trade and welfare of the two countries of the following: (a) An increase in Home’s amount of land. (b) An increase in Home’s labor supply. (c) An increase in Foreign’s amount...
The standard trade model. Home and Foreign have two factors of production, land and labor, with...
The standard trade model. Home and Foreign have two factors of production, land and labor, with which they produce two goods, wheat and wine. Technology is the same in the two countries. Wheat is land intensive, and Home is land abundant. Graphically analyze the effects on the terms of trade and welfare of the two countries of the following: (a) An increase in Home’s amount of land. (b) An increase in Home’s labor supply. (c) An increase in Foreign’s amount...
1. The Heckscher–Ohlin model Home and Foreign have two production fac- tors, skilled and unskilled labor...
1. The Heckscher–Ohlin model Home and Foreign have two production fac- tors, skilled and unskilled labor and produce two goods, textiles and com- puters. Home is skilled labor abundant, and computers are skilled labor intensive. Starting from a situation of autarky, the two countries liberalize trade. Assuming that the two countries produce both goods before and after trade liberalization, answer the following questions: (a) What is the effect of trade liberalization on the relative price of com- puters at Home...
Assume that Home and Foreign produce two goods, televisions and cars, and use the following infor...
Assume that Home and Foreign produce two goods, televisions and cars, and use the following information to answer the questions. Suppose the world relative price of cars in the trade equilibrium is P/PTv-1. In the no-trade equilibrium: Home Country Foreign Country Wagery 12 MPLIV 2 Wagec MPL = ? Wage? MPL? Waget 6 MPL-1 TV TV Fill in the missing information in the table. What is the no-trade relative price of television in the Home country? What is the no-trade...
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...
Consider a world with two countries, Home and Foreign, both able to produce two goods: cloth and tablet computers. The p...
Consider a world with two countries, Home and Foreign, both able to produce two goods: cloth and tablet computers. The production of both goods uses capital and labor in fixed proportions, with the tablets industry using more capital per worker than the cloth industry. The units of each input needed to produce one unit output are given by: capital Labor Cloth 1 2 Tablets 2 1 Both countries have 150 units of capital available for production, but the Home country...
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:
Consider a general model of Ricardian trade with 2 countries (Home and Foreign) and 2 goods (Clothing and Food):...
P.S: (3）is the world relative price =3
There are two countries, Home and Foreign. The two countries can produce two goods, socks (S) and hats (H) using only labour. The labour stock in Home is L = 600 and the labour stock in Foreign is L* = 300. The unit labour requirements for socks and hats are as = 2 and au = 4 for Home and as = 1 and ay = 5 for Foreign. - 1. Assume that...
5- (Table: Home and Foreign Prices for Manufacturing and Agriculture) Consider the information provided about the price of agriculture and manufacturing goods in two countries (Home and Foreign). If the two countries open their markets for trade, then Home Foreign S5 S3 S7 Pa S3 Pa A) Home has the comparative advantage in agriculture. B) Home has the comparative advantage in manufacturing. C) Foreign has absolute advantage in both goods. D) Foreign has a comparative advantage in manufacturing.
5- (Table:...
Assume that Home and Foreign produce two goods, televisions and cars, and use the following information to answer the questions. Suppose the world relative price of cars in the trade equilibrium is P/PTv-1. In the no-trade equilibrium: Home Country Foreign Country Wagery 12 MPLIV 2 Wagec MPL = ? Wage? MPL? Waget 6 MPL-1 TV TV Fill in the missing information in the table. What is the no-trade relative price of television in the Home country? What is the no-trade...
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...
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