One explanation for the Leontief paradox is: Leontief did not really understand the H-O model. O He did not take into consideration other factors of production, such as land and skilled labor. He correctly assumed that technology was the same for all countries, but had inaccurate data on factor propo"

One explanation for the Leontief paradox is: Leontief did not really understand the H-O model. O He did not take into consideration other factors of production, such as land and skilled labor. He correctly assumed that technology was the same for all countries, but had inaccurate data on factor propo"

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 5SCQ: At one point Canadas GDP was 1,800 billion and its exports were 542 billion. What was Canadas export...

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.(Ricardian Model) In class we worked through the trade example where Home had a comparative advantage in cheese (alc /alw < alc* /alw*). The result was that world price ratio was between the autarky price ratios of the two countries. We showed for the Home country that the opening of trade resulted in the workers’ real wage in terms of cheese remaining the same while the real wage in terms of wine increased. (There is no need to use diagrams to answer the questions below.) (a) With the opening of trade what will the nominal wage W* be in the Foreign country? (You will not be able to find a numerical value here.) Briefly explain. (b) What will happen with the opening of trade to the Foreign country’s real wage in terms of cheese and wine? Briefly explain.
7). 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. A. Which country has the absolute advantage in bananas? Why? B. Which country has the comparative advantage in bananas? Why? C. What is the autarky terms of trade in the US?
Part 2 question: Imagine you are one of the few highly skilled workers in a less developed country. Your country has been increasingly participated in Global Value Chains (GVCs) in the past decades. Is your country’s increasing involvement in GVCs is a good thing for you? Explain why. [Note: assume that you are primarily concerned about your wages, and you have no intention to migrate to other countries].
Consider an H-O economy in which there are two countries (US and France), two goods (wine and cheese) and two factors (capital and labor). In each question below you are given partial information about the model and asked to infer some other part. Treat each question separately and independently. a. Assume the US is labor-abundant and cheese is labor-intensive. What is the pattern of trade in free trade? (State what the US and France import and export). Which theorem is applied to get this answer? Explain. b. Suppose an increase in the labor force in the US causes cheese production to increase. Which factor is used intensively in wine production? Which H-O theorem is applied to get this answer? Explain. c. Suppose a decrease in the price of cheese causes a decrease in the wage rate in the US economy. Which factor is used intensively in cheese production in France? Which H-O theorem is used to get this answer? Explain. d. Suppose France exports wine, the capital-intensive good. Which…
International collaboration and globalization Your Policy Brief needs to consider the ways that the Australian economy is part of the Asian-Pacific region and connected to the rest of the world. Your team is analysing the ways that countries interact with each other for the purpose of elevating economic prosperity and overall wellbeing. Explain what is meant by the term globalisation, and what is the link between globalisation and wellbeing? (2-3 sentences) As the world continues to recover from the COVID-19 pandemic, give some examples of the ways that international collaboration and co-operation have been important for the global recovery? In what ways has international collaboration been under threat during the pandemic, and what policy arrangements and institutional settings can help to ensure that countries continue to co-operate with each other in the future? (2-3 sentences) The Australian Trade and Investment Commission (Austrade) reports on Australia’s trade patterns with the…
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In the Heckscher-Ohlin model, suppose the two factors of production are: high-skilled labor (H) and regular labor (L). The two sectors are manufacturing and business services. Manufacturing uses regular labor more intensively, and business services uses high-skilled labor more intensively. The two countries are the U.S. and China, and the U.S. has a comparative advantage in business services. a. Illustrate the effect of opening up to trade on the U.S. with the PPF and indifference curve diagram. Make sure you clearly label everything. What happens to the relative price of business services in the U.S.? Show clearly the gains from trade. b. What happens to the relative wage of high-skilled labor? Does inequality (the skill premium) increase? Show all work and explain. 2. Evidence for or against Heckscher-Ohlin model Leontieff Paradox i. Briefly describe the paradoxii.We discussed several explanations for the paradoxical result in class. Briefly describe two explanations. Inequality…
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…
Can part I and J be further explained/answered? I've already asked the question and recieved an answer but am unsure if the answer is corret.
The trade war between the united states and china1. What do you think the outcome of the “ war” will be? Will there be a winner and a loser? If so, who do you think will be the winner? (100 words)2. How will the between the united states and china have an impact on european countries? (50 words)3.How can the united states become less dependent on imports? (50 words)4. and come up with a new question. Added to cart
International trade policies: International trade policies refer to measures aimed at regulating the flow of goods and services between countries. In the case of a severe negative supply shock, the government may impose trade restrictions to limit the outflow of key inputs or to protect domestic producers. However, this can lead to higher prices for consumers and retaliation from trading partners, which can harm exports and further reduce supply. Explain with a graph please.
GLOBALIZATION IN THE PHILIPPINE CONTEXT Instruction: Choose a pair from your class and answer the questions related to globalization in the table below. One of you should take the position of the globalist and one should take the position of an anti-globalist. Unlike the statements found on the discussion, the answers to each of these questions should be related to the effects of globalization in the Philippine context. Write in complete sentences. Globalist (Name of student) Anti-Globalist (Name of student) 1. Does globalization foster economic growth? 2. Is globalization good for the consumer? 3. Is globalization good for the working class? 4. Is globalization good for the environment? 5. Is globalization good for developing nations? 6. Does globalization promote human rights? 7. Does globalization foster the growth of democratic governments? 8. Does globalization improve the quality of life?