Explain in detail factor price equalisation. Discuss reasons why the factor price equalisation proposition may be unlikely to hold when we compare factor prices across economies.
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Explain in detail factor
proposition may be unlikely to hold when we compare factor prices across economies.
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- Consider a world composed of two countries, Home (H) and Foreign (F). Individuals living in each countryi H, F have preferences over two goods x and y.In each country there is only one factor of production, labour, which is perfectly mobile between industries butimmobile between countries. The total labour endowment at Home is LH = 10 and the total labour endowmentin Foreign is LF = 10.The marginal product of labour in each industry is constant. At Home, one worker can produce 2 units ofgood x or 1 unit of good y per unit of time; at Foreign one worker can produce 1 unit of good x or 2 units of goody per unit of time.Assume that consumers in Home and Foreign always consume goods x and y in the same quantity regardlessof their prices. That is, Cxi = Cyi, i = H, F C. Determine the equilibrium price of good x (setting the price of good y as 1) that prevails at Home and Foreig under autarky – that is, when they do not trade with each other. Explain why any other price could not be the…David Card's study on the so-called "Mariel Boatlift" found supporting evidence for the... Medium Equilibrium approach to modeling the impact of immigration on wages None of the above 0000 General Equilibrium approach to modeling the impact of immigration on wages Partial Equilibrium approach to modeling the impact of immigration on wagesdiscuss the key concepts of the Heckscher-Ohlin Model in factor abundence
- Explain the general equilibrium structure of neoclassical trade theoryThe figure on the right shows the market for labor in a given industry. The demand curve is downward-sloping because marginal productivity falls as more workers are employed, while the supply curve is upward-sloping since an increase in the wage increases the opportunity cost of leisure Now suppose that technological change occurs that is labor complementary, all else constant. 1.) Using the line drawing tool, show the impact of this event. Label your curve appropriately. Carefully follow the instructions above and only draw the required object. According to the graph, the consequence of the change in technology is a higher market wage and a lower level of employment. Daily wage fe Days worked per year D₂ S₁ D₁International trade leads to complete equalization of factor prices. Discuss
- Complete the following table by selecting the term that matches each definition on the left. Definition The graphical representation of the relationship between the wage rate and the quantity of labor workers are willing to provide in a market The graphical representation of the relationship between the wage rate and the quantity of labor firms are willing to hire in a market The additional revenue the firm receives from selling the output produced from an additional unit of labor The increase in the amount of output from an additional unit of labor Market Labor Supply Curve Market Labor Demand Curve Marginal Product of Labor O Which of the following events may increase the marginal product of labor? Check all that apply. A technological improvement that is substitutable for the labor in this market Good weather causes an increase in supply and a fall in price for one of the inputs used to make the good A technological improvement that is complementary for this type of labor A decrease…Explain it early I upvote definitely.Roger's World of Pets is considering adding cat grooming to the array of goods and services he currently provides. He estimates that consumers would be willing to pay $25 per cat for a 1 hr. cat grooming appointment. He also estimates that he would need 2 workers per cat (1 to hold the cat down and the other to groom the cat). Wages in this labor market are $15/hr. Using marginal analysis, Roger should: introduce cat grooming. do not offer cat grooming be on the fence ("indifferent") about introducing cat grooming. be unable to tell whether cat grooming is a good idea because we don't know how much he pays in rent for his shop.
- What are the answers for mixed and pure specific factor models? Are the answers for both (B. Owners of A will benefit)? Please help and explain In the Question1Mixed and Question2Pure Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific to C and Land (A) is specific to W. If the government imposes a tariff on the imports of W then A. Both owners of K and owners of A will benefit. B. Owners of A will benefit. C. Owners of K will benefit. D. Neither owners of K nor owners of A will benefit.In period t, a parental household (indexed by i) equipped with human capital hit earns a labour income of wh^i_t, where w > 0 represents a constant wage rate. This household derives utility out of own consumption c^i_t, the number of children nit and their level of human capital h^i_(t+1). Education is provided by teachers who are equipped with the economy’s average level of human capital h^T_t . Human capital per child evolves from one period to another according to h^i_(t+1) =(e^i_t +e ̄)^η(h^i_t)^τ(h^T_t )^(1−τ), 0 < η, τ < 1 (1) where e ̄ > 0 is a constant parameter and e^i_t represents the level of education per child.The households’ utility function is specified as U_t^i = ln(c^i_t) + γ[ln(n^i_t) + βln(h^i_(t+1))] (2) with γ,β > 0.Raising one child to adulthood requires a share of 0 < z < 1 units of time. Moreover, education is subsidised at a rate 0 ≤ s_e < 1, such that education costs per child amount to wh^T_t e^i_t(1 − s_e). Solve household i’s…One reason that a large share of the trade between high-income industrial economies is intra-industrytrade is becauseA) Intra-industry it is more advantageous than inter-industry tradeB) high-income industrial economies compete with each other with the same good.C) high-income industrial economies have very different factor endowments in absolute terms.D) it allows firms to take advantage of economies of scale.
