c. Consider a Ricardian model with two countries, the US and Ecuador, producing two goods, bananas and machines. Suppose the unit-labor requirements are:  aLBUS= 8, aLBE = 4, aLMUS = 2, aLME = 4.  Let the US have 3200 workers and Ecuador have 400 workers.  D. What would the pattern of trade be in free trade? Why? E. How much of each good would Ecuador produce in free trade if complete specialization occurred? F. Specify a plausible free trade terms of trade

Q: The theories of absolute and comparative advantage have been offered as an economic rationale for…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Using the Heckscher-Ohiln trade model, we would expect that in a nation that is labor abundant that…

A: The Hecksher Ohlin theorem states that  a labor abundant nation exports labor intensive good and its…

Q: Suppose that there are only two countries (the United States and Mexico) and only two goods (…

A: Comparative advantage is an economic principle that states that a country, individual, or entity can…

Q: Canada has negotiated free trade agreements with several countries. With reference to theories of…

A: Free trade refers to when products and services may be purchased and sold freely across nations or…

Q: Consider the Heckscher-Ohlin model of international trade. There are two goods, shoes and computers,…

A: The Heckscher-Ohlin model assumes that two countries indulge in international trade because they…

Q: A free-trade equilibrium exists in which United States exports Food and imports clothing  from…

A: In this situation, A free-trade equilibrium exists in which United States exports Food and imports…

Q: Consider an H-O economy in which there are two countries (US and France), two goods (wine and…

A: One of the most prominent models of international commerce is the Heckscher-Ohlin (H-O; sometimes…

Q: What is the essence of the​ "terms-of-trade" argument against free​ trade? A. A large country can…

A: The relative value or ratio between a country's exports and imports is the terms of trade (TOT). It…

Q: Q68 Suppose all countries try to expand their exports and restrict their imports through the use of…

A: Q68 Suppose all countries try to expand their exports and restrict their imports through the use…

Q: If Canada has stricter laws for environmental protection than Mexico, and if these laws restrict…

A: Here, it is given that Canada has relatively strict enviornmental protection laws as compared to…

Q: a. What is the autarky terms of trade in the US?

A: In autarky the relative price ratio is equal to the relative cost ratio.  Autarky price ratio in US…

Q: Consider a Ricardian model of trade with two countries (US, Mexico) and two goods (strawberries,…

A: Mexico has a comparative advantage in producing strawberries due to the opportunity cost of…

Q: Hours of Labor Required to produce Cheese and  Wine     USA FRANCE Cheese 20 30 Wine 8 20…

A: "Since you have asked multiple parts, we will answer only the first part for you. If you have any…

Q: International trade Consider a Ricardian model with two countries, the US and Ecuador, producing two…

A: A country has a comparative advantage in a good it produces at a lower opportunity cost than the…

Q: If a country does not have an absolute advantage in the production of at least one commodity, then…

A: The statement in question is based on the concept of absolute advantage in international trade.…

Q: Suppose Big Country can produce 80 units of X by using all its resources to produce X or 60 units of…

A: Assuming constant costs, the opportunity cost of producing 1 unit of Y in big country is 1.33 units…

Q: Take into account an H-O economy where there are two factors (US and France), two items (wine and…

A: The Heckscher-Ohlin (H-O; sometimes known as the factor proportions) model is one of the most…

Q: Home has 1200 units of labor available. It can produce two goods, apples and bananas. The unit labor…

A: The exchange of commodities and services between countries is known as international trade.…

Q: Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume…

A: Absolute advantage alludes to the limit of any monetary specialist, either an individual or a…

Q: Suppose that Egypt produces cotton and lamb, and that it has comparative advantage in cotton. Draw…

A: Production possibility frontier(PPF) shows different combination of two good or services that can be…

Q: International trade Consider a Ricardian model with two countries, the US and Ecuador, producing…

A: The Ricardian model of international trade tries to clarify the inequality in comparative advantage…

Q: Consider the following data on two countries, A and B.                               A…

A: Here, the given table shows the total number of skilled and unskilled labor in country A and country…

Q: Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume…

A: iii) Comparative advantage implies producing a good with low opportunity cost than other country.…

Q: International trade 1. Consider a Ricardian model with two countries, the US and Ecuador, producing…

A: Given - Unit labour requirements in US :- For bananas (aLBUS) = 8 For machines (aLMUS) = 2   Unit…

Q: Define opportunity cost. Using the table above, calculate the opportunity cost of bicycles in terms…

A: Opportunity cost refers to the sacrifice of one set of goods when another set of goods are produced.…

Q: Choose four countries. One country in North America, another country in Central America, another…

A: Gravity Model:The gravity model is an economic concept and statistical model used to predict the…

Q: international trade Consider a Ricardian model with two countries, the US and Ecuador, producing…

A: Comparative advantage occurs when one country is able to produce a particular good at a lower…

Q: comparative advantage

A: Comparative advantage refers back to the monetary principle that states that entities (consisting of…

Q: The following hypothetical production possibilities tables are for China and the United States.…

A: a) If China uses all resources in producing only Apparel, China can produce 30 thousands of apparel…

Q: Suppose that companies in US can manufacture, using one year of labor, 10 units of machinery and 200…

A: Trade is vital to finishing worldwide neediness. Nations that are available to worldwide exchange…

Q: What is meant by gains from exchange? And by gains from specialization

A: Exchange gains show two traders with different endowments but similar preferences, earn a more…

Q: A free-trade equilibrium exists in which United States exports Food and imports clothing  from…

A: The Heckscher-Ohlin model is an economic theory that states that countries should export what they…

Q: Now suppose that if Zimbabwe uses all of its resources, it can produce 50,000 tons of metal ores or…

A: Both countries will trade that good in which they have a comparative advantage. The country has a…

Q: Please explain why the answer is false. Specializing in its comparative advantage and trading with…

A: Comparative Advantage: According to the law of comparative advantage, if a nation has an absolute…