Ab 1 Economics Gains and Losses from Trade in the Specific-Factors Model - Work It Out 1Use the information given here to answer the questions.Manufacturing:• Sales revenue = PM QM = 150Payments to labor = WLM = 100• Payments to capital = RK K = 50Agriculture:• Sales revenue = P₁ · QA = 150● Payments to labor = W. LA = 50• Payments to land= RT T = 100●Holding the price of manufactured goods constant, suppose there is an increase in the price of agriculture of 20% and an increasein the wage of 10%.a. What is the impact of the increase in the price of agricultural goods on the rental on land?What is the impact of the increase in the price of agricultural goods on the rental on capital?%%

In the specific-factors model, the impact of changes in prices on factor payments can be determined…

Gains and Losses from Trade in the Specific-Factors Model Use the information given here to answer the questions. Manufacturing: • Sales revenue = PM QM = 150 • Payments to labor = W LM = 100 • Payments to capital = RK K = 50 Agriculture: • Sales revenue = PA · QA = 150 • Payments to labor = W. LA = 50 Payments to land= RT · T = 100 - Work It Out 1 Holding the price of manufactured goods constant, suppose there is an increase in the price of agriculture of 20% and an increase n the wage of 10%. a. What is the impact of the increase in the price of agricultural goods on the rental on land? What is the impact of the increase in the price of agricultural goods on the rental on capital? % %

Gains and Losses from Trade in the Specific-Factors Model Use the information given here to answer the questions. Manufacturing: • Sales revenue = PM QM = 150 • Payments to labor = W LM = 100 • Payments to capital = RK K = 50 Agriculture: • Sales revenue = PA · QA = 150 • Payments to labor = W. LA = 50 Payments to land= RT · T = 100 - Work It Out 1 Holding the price of manufactured goods constant, suppose there is an increase in the price of agriculture of 20% and an increase n the wage of 10%. a. What is the impact of the increase in the price of agricultural goods on the rental on land? What is the impact of the increase in the price of agricultural goods on the rental on capital? % %

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter1: Introducing The Economic Way Of Thinking

Section: Chapter Questions

Problem 2SQ

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In the Specific Factors Model, assume that in Country A, "wheat" is produced by using land and labor, "leather" is produced by using capital and labor. Capital is defined as a (mobile/specific/fixed) factor.
There are two countries in the world economy: Home and Foreign. Home has 3000 units of labor available. It can produce two goods, coffee (C) and sugar (S). The unit labor requirement in coffee production at home, aLc, is 4, while the unit labor requirement in sugar production, aLs, is 10. Foreign has a labor force of 1600. Foreign’s unit requirement in coffee production, a*Lc, is 10, while the unit labor requirement in sugar production, a*Ls, is 2. Graph the production possibility frontier for both Home and Foreign. Use C in the vertical axis. What is the opportunity cost of coffee in terms of sugar in both Home and Foreign? Using the information (numbers) provided above, construct the world relative supply curve. Label it RS. The horizontal axis must show the world quantity of coffee relative to the world quantity of sugar, i.e., (Qc+Q*c)/(Qs+Q*s). The vertical axis must show the relative price of coffee with respect to the price of…
solve this macroeconomics question, i have attached all details.
Question 1 Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the following events: Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing.
© Macmillan Learning Production, Economic Growth, and Trade. - End of Chapter Problem Ice cubes are an enjoyable product that many take for granted since they are easily produced in a freezer. But prior to the invention of refrigeration in the late 19th century, obtaining ice in warm climates required it to be imported from cold environments, making it an expensive luxury item. The new technology of refrigeration increased allocative efficiency neither production nor allocative efficiency production efficiency both production and allocative efficiency in the economy.
Parts a and b please
Standard trade Model When comparing the agricultural sectors of the USA and the UK, we can analyze it within the framework of the standard trade model, also known as the neoclassical trade model. This model assumes perfect competition, constant returns to scale, and comparative advantage based on differences in factor endowments. Here's how the standard model can be applied to the agricultural sectors of the USA and the UK: a) Land: The USA has vast amounts of arable land, which can be used for agriculture. Its large land endowment can give it a comparative advantage in the production of various agricultural commodities. b) Labor: The UK's agricultural sector might not have a significant comparative advantage in labor-intensive agriculture due to relatively high labor costs compared to countries with lower wage levels. However, it may focus on niche agricultural products or high-value crops that require specialized labor or have specific geographical advantages. c) Capital: The…
1. Consider the following example of the Ricardian model Units of labor required per unit of output: France (F) Italy (I) 5 2 Beef (B) Corn (C) 3 4 Labor Force (a) Determine which country has an absolute advantage in which good and which country has a comparative advantage in which good. Compute opportunity cost ratios and relative autarky prices, defined as PC/PB. 48000 50000 (b) Draw the PPFs (put C on the horizontal axis) and label endpoints with appropriate figures. Supposing that each country splits its labor force in half between C and B in autarky, show the autarky equilibrium. (c) Now let the price ratio established in trade equal (Pc/PB)* = 1.0 and suppose France exports 500 units of beef. Determine each country's imports and exports, show the equilibrium trade triangles and compute the gains from trade for each country in terms of units of B and C. Briefly indicate which country gets larger gains and why.
Q24. Consider two identical, 2 good, 2-factor economies with IRS in both goods. Through trade, H exports X and F exports Y. i. Describe and show the circumstances under which H can be worse off from trade relative to autarky.. ii. Describe and show the circumstances under which F can be worse off from trade relative to autarky. iii. Are factor prices equal across the two countries in the above cases? Explain why or why not?
"Accoring to Ricardo's analysis, a country exports any good whose production requires fewer labor hours per unit than the labor hours per unit needed to produce the good in the foreign country. That is, the country exports any good in which its labor producivity is higher than the labor productivity for this good in the foreign country." Do you agree or disagree? why?
Suppose a country which produces only agricultural goods and electronic goods. Both goods use capital and labour as production inputs, however, the agricultural goods are assumed to be more labour-intensive. On three separate graphs, draw the “original” production possibility boundary (electronic goods on the horizontal axis, agricultural goods on the vertical axis) and illustrate each of the following situations: a. the country observes large increases in immigration; b. there is a technological improvement in the production of military goods only;c. a neighbouring country threatens to invade and the country responds by devoting more resources to military goods.