One way in which the Heckscher-Ohlin model differs from the Ricardian model ofcomparative advantage is by assuming that ...............is/are identical in all countries.O a. factor intensitiesO b. scale of productionO c. opportunity costsO d. factor endowmentsO e. technologyQUESNot JMarkFla

As a result of the fact that trade is essential for a nation's economic growth, many economists…

One way in which the Heckscher-Ohlin model differs from the Ricardian model of comparative advantage is by assuming that ..............is/are identical in all countries. a. factor intensities O b. scale of production O c. opportunity costs O d. factor endowments O e. technology A Not y Mark P Fla

One way in which the Heckscher-Ohlin model differs from the Ricardian model of comparative advantage is by assuming that ..............is/are identical in all countries. a. factor intensities O b. scale of production O c. opportunity costs O d. factor endowments O e. technology A Not y Mark P Fla

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume a Ricardian model. The following table shows the amount of output produced by each unit of labor in Germany and France and also the amount of labor available in those countries. Wheat (W) Computers (C) France 5 8 Germany 2 4 (a) Under free trade each country completely specializes in the good in which it has comparative advantage. Germany has 90,000 units of labor. Germany consumes 105,000 tons of wheat whether it is in autarky (no trade) or in free trade. Suppose under free trade the terms of trade are 1W = 1.75C. How many computers does Germany gain when its economy moves from autarky to free trade? Fermany produces Comparative wheat 525d = 0) once advantage. trade
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The theory of comparative advantage: O a. Claims that economic well-being is enhanced if each country's citizens produce only a single product. Ob. Claims that economic well-being is enhanced when all countries compare commodity prices after adjusting for exchange rate differences in order to standardize the prices charged by all countries. O. Claims that economic well-being is enhanced if each country's citizens produce that which they have a comparative advantage in producing relative to the citizens of other countries, and then trade production. O d. Claims that no country has an absolute advantage over another country in the production of any good or service.
Suppose we are considering a HO model setting, where countries have not yet opened up to trade. Two goods are produced exclusively by domestic labor supplies, tires and vehicle frames. Suppose a tire is labor-intensive in production whereas constructing vehicle frames is a capital intensive task that more frequently features automated machinery. Home and foreign maintain the following capital (K) and labor (L) endowments. Factor L K Home 1120 575 Foreign 1680 950 Suppose these countries transition into a free trade scenario. Using the previous details about both countries, perform the following tasks. (i) Sketch a world relative price, CPC line, through your bundle such that it passes through the PPF (it will have no tangency to PPF). (ii) Using this CPC line, with its fixed slope, shift the line until it is perfectly tangent with the indifference curve. Update your sketch with this newly labeled CPC. (iii) Correctly label the equilibria points at which Home consumes and produces. (iv)…
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