Movement of Labor and Capital Between Countries In this question, we use the Rybezynski theorem to review the derivation of the Heckscher-Ohlin theorem. a. The accompanying diagram shows no-trade cquilibriums on the Home PPFS. Suppose that through immigration, the amount of labor in Home grows. Move point A to the point on the new PPF indicating where production would occur with the same prices for goods. b. The point you found in part a does not illustrate where the no-trade equilibrium will actually occur. Place point B at the true no-trade equilibrium point on the new PPF, after immigration. 20 19 18 Retative price 17 16 15 14 12 10Relative prce 7. 2. PPE PPF 01234 56789 10 11 12 13 14 15 16 17 18 19 20 Output of computen, Q Output of shoes, Q

Movement of Labor and Capital Between Countries In this question, we use the Rybezynski theorem to review the derivation of the Heckscher-Ohlin theorem. a. The accompanying diagram shows no-trade cquilibriums on the Home PPFS. Suppose that through immigration, the amount of labor in Home grows. Move point A to the point on the new PPF indicating where production would occur with the same prices for goods. b. The point you found in part a does not illustrate where the no-trade equilibrium will actually occur. Place point B at the true no-trade equilibrium point on the new PPF, after immigration. 20 19 18 Retative price 17 16 15 14 12 10Relative prce 7. 2. PPE PPF 01234 56789 10 11 12 13 14 15 16 17 18 19 20 Output of computen, Q Output of shoes, Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hello, I am having problems with these two questions. Refer to attached picture for questions. Consider two countries, Korea and Malaysia, and two goods, lumber and automobiles. Korea’s PPF is biased towards automobiles, and Malaysia’s PPF is biased towards lumber. They have the normal, concave to origin, increasing opportunity cost shape.
Below are hypothetical production possibilities tables for New Zealand and Spain. Each country can produce apples and plums. Referring to the tables, answer the following: Suppose the optimal product mixes before specialization and trade are alternative B in New Zealand and alternative S in Spain and the actual terms of trade are 1 plum for 2 apples. What will be the gains from specialization and trade?
Suppose that a worker in Country A can produce either 6 units of corn or 2 units of wheat per year, and a worker in Country B can produce either 2 units of corn or 6 units of wheat per year. Each nation has 10 workers. Without trade, Country A produces and consumes 30 units of corn and 10 units of wheat per year. Country B produces and consumes 10 units of corn and 30 units of wheat. Suppose that trade is then initiated between the two countries, and Country A sends 30 units of corn to Country B in exchange for 30 units of wheat. Country A will now be able to consume a maximum of Select one: a.30 units of corn and 30 units of wheat. b.40 units of corn and 20 units of wheat. c.40 units of corn and 30 units of wheat. d.10 units of corn and 40 units of wheat.
true/false explain If an advanced country has an absolute advantage in the production of everything (relative to certain less developed countries), the advanced country will benefit if it eliminates trade with less developed countries and becomes self-sufficient.
Suppose that a country with a bowed-out PPF is operating efficiently. The country can produce either capital-intensive goods or labor-intensive goods. If the country DECREASES its production of labor-intensive goods, the opportunity cost of producing labor-intensive goods remains constant. cannot be determined from the given information. increases. decreases.
Assume that Bangladesh can make 100 square yards of textiles (T) OR 20 computer chips (CC) per day, while Taiwanese worker can make 60 square yards of textiles (T) OR 90 computer chips (CC) per day. Assume that: at of 1) in autarky, each country produced at the midpoint of their PPCS uestion 2) each country completely specializes in the appropriate product 3) 40 square yards of T are exchanged for 40 units of CC. What are their gains from trade? Select one: O a. Bangladesh 10 T and 30 CC: Taiwan 10 Tand 5 C. O b. None of the answers offered are correct. O C. Bangladesh 40 T ahd 60 CC Taiwan 50 T and 40 C. O d. Bangladesh 0 T and 30 CC Taiwan 20 Tand 0 C. Oe. Bangladesh 10 T and 10 CC Taiwan 15 Tand 15 C
Now suppose that if Zimbabwe uses all of its resources, it can produce 50,000 tons of metal ores or 100,000 delivery trucks (trading off at a constant rate). Suppose that if South Africa uses all of its resources, it can produce 20,000 tons of metal ores or 80,000 delivery trucks (trading off at a constant rate). What is the direction of trade (who exports what to whom)? Be sure to give the opportunity costs of production of both goods for both countries. What is one potential price of metal ores in terms of trucks at which both Zimbabwe and South Africa would benefit from trade? Rank the autarkic prices and the world price of metal ores from lowest to highest.
According to the Heckscher-Ohlin model, free trade would lead to an equalization of wage rate internationally. Explain why we do not observe that result in the real world, where, for instance, there is great discrepancy in wage rate between developed and developing countries
On the same graph, draw two PPFs: one for Arizona and one for North Dakota. Assume Arizona can produce 80 bales of hay or 20 pounds of sunflowers. North Dakota can produce 30 bales of hay or 120 pounds of sunflowers. For both states, points in between these limits are possible. Show how the total production of hay and sunflowers is greater with specialization than with self-sufficiency. Assume that the states trade 20 bales of hay for 30 pounds of sunflowers. Demonstrate the gains from trade with points on your graph. 1. Explain the opportunity costs of producing 1 bale of hay and 1 pound of sunflowers for each state. 2. Draw your own PPF graph on a piece of paper. 3. Clearly label all axes and lines. Include all relevant information.