Assume that only two countries, A and B exist, as shown in the table below.Factor endowmentsLabour force 45Capital stock 15Country A Country BIf good S is capital intensive, then following the Heckscher-Ohlin theory:O C.2010O a. country A will export good S.O b. trade will not occur between these two countries.both countries will export good S.both countries will import good S.country B will export good S.O d.O e.A

The Heckscher-Ohlin theory explains that countries tend to specialize in producing goods that…

Assume that only two countries, A and B exist, as shown in the table below. Factor endowments Labour force 45 Capital stock 15 Country A Country B 20 10 If good S is capital intensive, then following the Heckscher-Ohlin theory: a. country A will export good S. O b. trade will not occur between these two countries. C. d. e. both countries will export good S. both countries will import good S. country B will export good S. 4

Assume that only two countries, A and B exist, as shown in the table below. Factor endowments Labour force 45 Capital stock 15 Country A Country B 20 10 If good S is capital intensive, then following the Heckscher-Ohlin theory: a. country A will export good S. O b. trade will not occur between these two countries. C. d. e. both countries will export good S. both countries will import good S. country B will export good S. 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Question 1A. Define and explain the theory of comparative advantage (use an example ifnecessary).B. Discuss limitations of comparative advantage (Include in your answer at leastfive key limitations to this theory).C. Spencer Grant is a New York-based investor. He has been closely following hisinvestment in 100 shares of Vaniteux, a French firm that went public in Februaryof 2010. When he purchased his 100 shares at €17.25 per share, the euro wastrading at $1.360/€. Currently, the share is trading at €28.33 per share, and thedollar has fallen to $1.4170/€.a If Spencer sells his shares today, what percentage change in the share pricewould he receive?What is the percentage change in the value of euro versus the dollar overthis same period?What would be the total return Spencer would earn on his shares if he soldthem at these rates?
If the two nations operate in autarky, which of the black points (plus symbol) are attainable for Fireton? Check all that apply. Point A Point B Point C Point D Suppose the two nations decide to trade with each other at a rate of one robot vacuum cleaner per plastic army man (1:1). On the previous graph, use the green line (triangle symbol) to represent the terms of trade to help you find your answer to the following question. You will not be graded on where you place the line on the graph. Which of the grey points (star symbol) that were not attainable by either country in autarky are attainable once the countries agree to trade, holding all else constant? Check all that apply. Point W Point X Point Y Point Z Suppose Fireton and Greenburg engage in trade, and both nations desire the same post-trade consumption bundle. (Note: Assume both countries will not waste any resources.) Greenburg will robot vacuum cleaners.
Assume a Ricardian model. The following table shows the amount of output produced by each unit of labor in Germany and France and also the amount of labor available in those countries. Wheat (W) Computers (C) France 5 8 Germany 2 4 (a) Under free trade each country completely specializes in the good in which it has comparative advantage. Germany has 90,000 units of labor. Germany consumes 105,000 tons of wheat whether it is in autarky (no trade) or in free trade. Suppose under free trade the terms of trade are 1W = 1.75C. How many computers does Germany gain when its economy moves from autarky to free trade? Fermany produces Comparative wheat 525d = 0) once advantage. trade
Consider an economy with just one technique available for the production of each good. Good Labor per unit output Land per unit output Food 1 2 Cloth a. Suppose land is unlimited but labor equals 100. Write and sketch the production possibility frontier. b. Suppose labor is unlimited but land equals 150. Write and sketch the production possibility frontier. c. Suppose labor equals 100 and land equals 150. Write and sketch the production possibility frontier. Hint: What are the intercepts of the production possibility frontier? When is land fully employed? Labor? Both d. Explain why the production possibility frontier of part (c) is concave. e. Sketch the relative price of food as a function of its out put in part (c). f. If consumers insist on trading 4 units of food for 5 units of cloth, what is the relative price of food? Why? g. Explain why production is exactly the same at a price ratio of pr/pc = 1.1 as at pr/pc = 1.9. h. Suppose that capital is also required for producing food…
Suppose two countries, France and Germany, use only capital and labor for production. Factor endowments of the nations are presented in the table below. Capital | Labor France 2200 800 Germany 880 220 a. Which country is labor-abundant? Which country is capital-abundant? b. Assume that both countries produce two goods, cars and wine. If cars are capital-intensive and wines are labor-intensive, which country should specialize in the production of cars? Which country should specialize in the production of wines? Explain why?
4. What is the relationship between the concept of comparative advantage and the law of increasing opportunity cost?
I don't understand the second part of this homework. If Frankie and Johnny completely specialize according to comparative advantage, what will happen to the amount of eggs and milk? I have the opportunity cost calculated to understand who should do what in this case. But what will I do to that number?
Determine whether the scenarios below represent absolute or comparative advantage: A. Absolute Advantage B. Comparative Advantage ? ✓ 1. Brazillia can produce travelling with a lower opportunity cost than other countries ? ✓ 2. Carpentras can produce travelling services using 10 units of resources while Moldorie can produce it using 4 units of resources ? 3. A country uses fewer resources to produce a certain product v
Both Geppetto and Lewis are toy store owners. They decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Lewis Puzzles Puppets Puzzles Puppets 90 75 10 8 60 15 12 16 45 20 8 24 30 25 32 40 030 Instructions: Enter your answers as a whole number. a. Geppetto and Lewis agree to trade at a rate of 3 puzzles for each puppet. With those terms of trade, who is most likely to be the supplier of puzzles? Who is most likely to be the supplier of puppets? Puzzles: (Click to select) Puppets: (Click to select) b. The two toy store owners agree to specialize and to trade 30 puzzles for 10 puppets. The terms of trade are still 3 puzzles for each puppet. How many puzzles and puppets will each one have after they complete their trade? Lewis: puzzles and puppets Geppetto: puzzles and puppets
Consider an economy with two producers, Sidney and Connor. Each allocates 8 hours per day between the production of chocolate and bananas. Given 8 hours of labour, Sidney can produce 80kg of chocolate or 16kg of bananas. Connor can produce either 2kg of chocolate or 4kg of bananas per hour. B) Introducing Trade i) Suppose production capacity does not change. Do we expect there to be trade between Sidney and Connor? Why or why not? ii) What are the bounds on the price of bananas (in terms of chocolate) if there is trade? In other words, what range must the price of bananas fall within? iii) Assume a price of 4. In other words, 1kg of bananas cost 4kg of chocolate. Explain why trade is likely to make both Sidney and Connor better off in this case.
Which country has the absolute advantage in production of Good A? Group of answer choices: Country Y Neither country has an absolute advantage of producing Good A Country X