Part A. These questions help you review the Heckscher-Ohlins model. Determine whether each statement is T/F,...
Part A. These questions help you review the Heckscher-Ohlins model. Determine whether each statement is T/F, and then briefly explain why. 32 points.
1. Consider the following Heckscher-Ohlin model. France and Italy produce wine and bread. Bread is capital intensive, while wine is labor intensive. France is capital abundant, while Italy is labor abundant.(22 points total, 2 points each)
For questions (3)-(11), consider the movement from closed-economy to free trade.
(5). The capital owners in France support free trade.
(6) French workers’ real wage for bread increases.
(7). The real rental rate of capital for wine increases in Italy.
(8). The relative demand for labor increases in France.
Homework Answers
5 yes because abundant factor gains from trade as per H-O theory and France is capital abundant
6 false since France is capital abundant rental rate will rise but real wage fall as per factor equalization theorem
7 false since Italy is labour abundant
8 it falls since more labour intensive goods are imported
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Part A. These questions help you review the
Heckscher-Ohlins model. Determine whether each statement is T/F,...
Please help me to solve this problem, thank you so much. Part A. These questions help you review ...
Please help me to solve this problem, thank you so much. Part A. These questions help you review the Heckscher-Ohlins model. Determine whether each statement is T/F, and then briefly explain why. 32 points. 1. Consider the following Heckscher-Ohlin model. France and Italy produce wine and bread. Bread is capital intensive, while wine is labor intensive. France is capital abundant, while Italy is labor abundant.(22 points total, 2 points each) (1). Italy has a larger labor force than France. (2)....
Suppose when Japan opens to trade, it imports rice, a labor intensive good. According to the...
Suppose when Japan opens to trade, it imports rice, a labor intensive good. According to the Heckscher –Ohlin theorem, is Japan capital abundant or labor abundat? Explain. What is the impact of opening trade on the real wage in Japan? What is the impact of opening trade on the real rental rate on capital? What does the Heckscher Ohlin model assume about labor mobility across industries? Across countries? Which group (capital owners on workers) would support policies to limit free...
Problem 2 Suppose when Japan opens to trade, i imports rice, a labor intensive good. n)...
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KFrance and Italy only trade with each other; (each country is only capable of producing 2...
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1. This problem uses the Heckscher-Ohlin model to predict the direction of trade. Consider the production...
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6. Suppose when Japan opens to trade, it imports rice, a labor-intensive good. a. According to...
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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)....
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6. Suppose when Japan opens to trade, it imports rice, a labor-intensive good. a. According to the Heckscher-Ohlin theorem, is Japan capital-abundant or labor-abundant? Briefly explain. b. What is the impact of opening trade on the real wage in Japan? c. What is the impact of opening trade on the real rental on capital? d. Which group (capital owner or labor) would support policies to limit free trade? Briefly explain.
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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