Assume that Home and Foreign produce two goods, TVs and cars, and use the information below to answer the following questions: Home Country Foreign Country Wage tv = 12. MPLtv =2 Wage*tv = ? MPL*tv =? P*tv = 3 Ptv = ? Wage c = ? Wage*c = 6 MPL*c =1 P*c = ? MPLc =? Pc=4 What is the marginal product of labor for TVs and cars in the Home country? What is the no-trade relative price of TVs at Home? What is the marginal product of labor for TVs and cars in the Foreign country? What is the no-trade relative price of TVs in Foreign? Suppose the world relative price of TVs in the trade equilibrium is PTV /PC = 1. Which good will each country export? Briefly explain why.
Assume that Home and Foreign produce two goods, TVs and cars, and use the information below to answer the following questions:
Home Country Foreign Country
Wage tv = 12. MPLtv =2 Wage*tv = ? MPL*tv =? P*tv = 3
Ptv = ? Wage c = ? Wage*c = 6 MPL*c =1 P*c = ?
MPLc =? Pc=4
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What is the marginal product of labor for TVs and cars in the Home country? What is the no-trade relative
price of TVs at Home? -
What is the marginal product of labor for TVs and cars in the Foreign country? What is the no-trade relative price of TVs in Foreign?
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Suppose the world relative price of TVs in the trade equilibrium is PTV /PC = 1. Which good will each country export? Briefly explain why.
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