in the specific factors model, suppose that the price for food increased by 5% and the...
in the specific factors model, suppose that the price for food increased by 5% and the price of cloth increased by 10%. explain the effects on labor allocation and production. also, explain the welfare effect on labor, capital and land owners. assume that land is specific to food production, while capital is specific to cloth production.
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in the specific factors model, suppose that the price for food increased by 5% and the...
29) In the specific factors model, a 0% increase in the price of food accompanied by...
29) In the specific factors model, a 0% increase in the price of food accompanied by 5% increase in he price of cloth will cause wages to food to A) increase by more then 5%; increase; remain unchanged B) increase by less then 5%; increase; decrease C) remain constant; decrease; decrease D) increase by 5 % ; remain unchanged; remain unchanged E) remain constant; increase; increase , the production of cloth to and the production of В 30) Refer to...
Specific Factor Model 3. Specific factor model a. Why is the specific-factors model referred to as...
Specific Factor Model
3. Specific factor model a. Why is the specific-factors model referred to as a short run model? b. An economy can produce good 1 using labour and captal and good 2 using labour and land. The total supply of labour is 100 units. Given the supply of capital, the output of the two goods depend on labour input as follows: Labor Input to GoodI Labor Input to Good 2 Output of Good 2 0.0 39.8 52.5 61.8...
4. The income distribution effects in the specific factors and H (a) Explain the effect internati...
4. The income distribution effects in the specific factors and H (a) Explain the effect international trade on income distribution predicted by the specific factors model Your explanation should be in most general terms, that is, not in terms of cloth and food or labor and capital but in the terms used by the specific factors model mobile factor and specific factor. (b) In a similar fashion, explain the effect international trade on income distribution predicted by the Heckscher-Ohlin model....
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)...
The specific factors model 1) Consider a family of farmers. Grandma owns the machinery necessary to...
The specific factors model
1) Consider a family of farmers. Grandma owns the machinery
necessary to produce corn, while Grandpa owns the machinery
necessary to produce soybeans. Their children carry out the work
required to produce both corn and soybeans. Assume that production
functions for the two goods are concave in labor.
(a) Starting with the profit maximizing condition w = P × M P L,
derive the diagram we have introduced in class. In the diagram,
show the areas...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods to foreign country. Use the following information to answer the questions below: Manufacturing: Sales revenue Pm x Qm = 150 Payments to labor = W x Lm = 100 Payments to capital = Rkx K = 50 Sales revenue Pax Qa 150 Payments to labor W x La 50 Agriculture: Rt x T 100 Payments to land Holding the price of agriculture constant, suppose...
These questions are about international trade. I want to know the answers. 5 Heckscher-Ohlin Model. Suppose...
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...
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...
2. Specifie-factors model Suppose that land is specific to com, capital is specific to automobiles, labor is mobile...
2. Specifie-factors model Suppose that land is specific to com, capital is specific to automobiles, labor is mobile between sectors, and payments are as follows: Automobiles: Sales revenue = 200; Payments to labor = 100; Payments to capital = 100 Corn: Sales revenue = 200; Payments to labor = 40; Payments to land - 160 Suppose price of corn increases by 20%, the price of automobiles increases by 5%, and the wage increases by 10%. a. The relative price of...
4. In the specific-factors model, assume that the price of agricultural goods decreases while the price...
4. In the specific-factors model, assume that the price of agricultural goods decreases while the price of manufactured goods is unchanged in the HOME country (APAPA 0 and APMPM 0). HOME country exports the manufacturing goods. a. Based on the prediction of the specific-factors model, who (The owner of capital or owner of land) is better off? b. Arrange the following terms in ascending order (Please show the steps clearly): APM PM APAPA ARK RK ARTRT AWIW (A diagram like...
29) In the specific factors model, a 0% increase in the price of food accompanied by 5% increase in he price of cloth will cause wages to food to A) increase by more then 5%; increase; remain unchanged B) increase by less then 5%; increase; decrease C) remain constant; decrease; decrease D) increase by 5 % ; remain unchanged; remain unchanged E) remain constant; increase; increase , the production of cloth to and the production of В 30) Refer to...
Specific Factor Model
3. Specific factor model a. Why is the specific-factors model referred to as a short run model? b. An economy can produce good 1 using labour and captal and good 2 using labour and land. The total supply of labour is 100 units. Given the supply of capital, the output of the two goods depend on labour input as follows: Labor Input to GoodI Labor Input to Good 2 Output of Good 2 0.0 39.8 52.5 61.8...
4. The income distribution effects in the specific factors and H (a) Explain the effect international trade on income distribution predicted by the specific factors model Your explanation should be in most general terms, that is, not in terms of cloth and food or labor and capital but in the terms used by the specific factors model mobile factor and specific factor. (b) In a similar fashion, explain the effect international trade on income distribution predicted by the Heckscher-Ohlin model....
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)...
The specific factors model
1) Consider a family of farmers. Grandma owns the machinery
necessary to produce corn, while Grandpa owns the machinery
necessary to produce soybeans. Their children carry out the work
required to produce both corn and soybeans. Assume that production
functions for the two goods are concave in labor.
(a) Starting with the profit maximizing condition w = P × M P L,
derive the diagram we have introduced in class. In the diagram,
show the areas...
Part II. The Specific-Factors Model 1. Assume under the Specific-Factors Model, home country export manufacturing goods to foreign country. Use the following information to answer the questions below: Manufacturing: Sales revenue Pm x Qm = 150 Payments to labor = W x Lm = 100 Payments to capital = Rkx K = 50 Sales revenue Pax Qa 150 Payments to labor W x La 50 Agriculture: Rt x T 100 Payments to land Holding the price of agriculture constant, suppose...
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...
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...
2. Specifie-factors model Suppose that land is specific to com, capital is specific to automobiles, labor is mobile between sectors, and payments are as follows: Automobiles: Sales revenue = 200; Payments to labor = 100; Payments to capital = 100 Corn: Sales revenue = 200; Payments to labor = 40; Payments to land - 160 Suppose price of corn increases by 20%, the price of automobiles increases by 5%, and the wage increases by 10%. a. The relative price of...
4. In the specific-factors model, assume that the price of agricultural goods decreases while the price of manufactured goods is unchanged in the HOME country (APAPA 0 and APMPM 0). HOME country exports the manufacturing goods. a. Based on the prediction of the specific-factors model, who (The owner of capital or owner of land) is better off? b. Arrange the following terms in ascending order (Please show the steps clearly): APM PM APAPA ARK RK ARTRT AWIW (A diagram like...
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