d. Explain what happens to the real wage in terms of clothing. Show and explain what happens to the real wage in terms of food. Are workers are better off? e. Building off part (c), show and explain what happens to the real returns (i.e. rents) to capital and land when the price of food falls and the price of clothing remains the same.
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3. A country's labor market between food (QF) and clothing (Qc) is currently in equilibrium. Labor is used to produce both goods. Land (T) is only used to produce food and Capital (K) is only us...
3. A country's labor market between food (Q) and clothing (Qc) is currently in equilibrium. Labor is used to produce both goods. Land (T) is only used to produce food and Capital (K) is only used...
3. A country's labor market between food (Q) and clothing (Qc) is currently in equilibrium. Labor is used to produce both goods. Land (T) is only used to produce food and Capital (K) is only used to produce clothing. a. Draw a graph that shows the equilibrium wage. Put the origin for the clothing axis on the left side of the graph. Be sure to clearly label your axes and indicate the equations that represent each curve b. Explain why...
1. A country's resources (land, labor, and capital) are used to produce the goods and services...
1. A country's resources (land, labor, and capital) are used to produce the goods and services that satisfy the wants of its population. For each of the following, identify whether it should be classified as land, labor, or capital and justify your conclusion. Remember to consider the economic use of these terms (i.e. land, labor, and capital). a four year college degre a. b. the software used to make Facebook available to users c. 100 shares of Microsoft stock d....
2. a. The home country is endowed with QF units of food and QC units of...
2. a. The home country is endowed with QF units of food and QC units of clothing. Use an indifference curve diagram to show this economy freely trading such that they export clothing and import food. On your diagram, indicate the endowment and consumption points as well as exports and imports, and the world relative price. Note: Only show the free trade equilibrium in part a. Do not show the autarky equilibrium. b. On your diagram, show what would happen...
1. A country's resources (land, labor, and capital) are used to produce the goods and services...
1. A country's resources (land, labor, and capital) are used to produce the goods and services that satisfy the wants of its population. For each of the following, identify whether it should be classified as land, labor, or capital and justify your conclusion. Remember to consider the economic use of these terms (i.e. land, labor, and capital). a. a four year college degree b. the software used to make Facebook available to users c. 100 shares of Microsoft stock d....
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land...
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land (T Home can produce cloth (Qc) with labor and capital, while producing food (QF) with labor and land. In this economy, labor is a mobile factor between the cloth and food industries. In contrast, capital is specific to the cloth industry, while land is specific to the food industry. Home's utility function, cloth production function, food production function are, respectively, given by U(Dc, Dr)...
Consider a small open economy (e.g. the Netherlands) producing two goods, clothing and food. The clothing...
Consider a small open economy (e.g. the Netherlands) producing two goods, clothing and food. The clothing industry uses capital (K) and labor (LC) as inputs, while the food industry uses land (La) and labor (LF ) as factors of production. The production technologies for the two industries are given by QC = K ¼ LC 3/4 ; QF = La1/2L F 1/2 . Also, the country is endowed with 216 units of capital, 360 units of labor, and 9 units...
Problem 1 A country (”Home”) is populated with 300 workers who produce either food (F) and/or...
Problem 1
A country (”Home”) is populated with 300 workers who produce
either food (F) and/or clothing (C). Each food worker produces 6
units of food and each clothing worker produces 3 units of
clothing. The preferences of the consumers over food and clothing
are represented by the utility function: u(DF ,
DC) = (DF ) 2/3 (DC)
1/3
1) Assuming that at the optimum, consumers set their marginal
rate of substitution, MRSDF ,DC , to the relative price,
i.e.,...
Heckscher-Ohlin model Country A produces cellphone (C) and food (F) with capital and labor. Both sectors...
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...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor (L). They each have technologies such that the Marginal Product of Capital is given by L (the amount of labor hired by the firm) and the Marginal Product of Labor is given by K (the amount of capital used by the firm). Thus, for Yasmin, the marginal rate of technical substitution for her firm is given by where the subscript indicates that this is...
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...
3. A country's labor market between food (Q) and clothing (Qc) is currently in equilibrium. Labor is used to produce both goods. Land (T) is only used to produce food and Capital (K) is only used to produce clothing. a. Draw a graph that shows the equilibrium wage. Put the origin for the clothing axis on the left side of the graph. Be sure to clearly label your axes and indicate the equations that represent each curve b. Explain why...
1. A country's resources (land, labor, and capital) are used to produce the goods and services that satisfy the wants of its population. For each of the following, identify whether it should be classified as land, labor, or capital and justify your conclusion. Remember to consider the economic use of these terms (i.e. land, labor, and capital). a four year college degre a. b. the software used to make Facebook available to users c. 100 shares of Microsoft stock d....
1. A country's resources (land, labor, and capital) are used to produce the goods and services that satisfy the wants of its population. For each of the following, identify whether it should be classified as land, labor, or capital and justify your conclusion. Remember to consider the economic use of these terms (i.e. land, labor, and capital). a. a four year college degree b. the software used to make Facebook available to users c. 100 shares of Microsoft stock d....
Problem. Home is an economy endowed with three production factors: labor (L), capital (K) and land (T Home can produce cloth (Qc) with labor and capital, while producing food (QF) with labor and land. In this economy, labor is a mobile factor between the cloth and food industries. In contrast, capital is specific to the cloth industry, while land is specific to the food industry. Home's utility function, cloth production function, food production function are, respectively, given by U(Dc, Dr)...
Problem 1
A country (”Home”) is populated with 300 workers who produce
either food (F) and/or clothing (C). Each food worker produces 6
units of food and each clothing worker produces 3 units of
clothing. The preferences of the consumers over food and clothing
are represented by the utility function: u(DF ,
DC) = (DF ) 2/3 (DC)
1/3
1) Assuming that at the optimum, consumers set their marginal
rate of substitution, MRSDF ,DC , to the relative price,
i.e.,...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor (L). They each have technologies such that the Marginal Product of Capital is given by L (the amount of labor hired by the firm) and the Marginal Product of Labor is given by K (the amount of capital used by the firm). Thus, for Yasmin, the marginal rate of technical substitution for her firm is given by where the subscript indicates that this is...
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...
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