QUESTION 6Question 3b- 3The Heckscher-Ohlin model rules out the classicalmodel's basis for trade by assuming thatis(are) identical between countries.Factor endowmentsFactor intensitiesTechnology.Opportunity costs. QUESTION 7Question 3b- 4Which of the following is TRUE regarding gains fromtrade?I. Exposure to new relative prices does not enhancethe welfare of the country.II. A country will only gain from trade if productionpatterns change amongst the trading countries.II. Specialization occurs according to the differentrelative prices leading to gains.IV. Tradeallowscountriestoreachhigherindifference curves than in autarky.Statements I and II.Statements Il and III.Statements IIl and IV.Statement II only.

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Answered: Question 3b-3 The Heckscher-Ohlin model…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Two economies have endowments (K,L) = (100,200) and (K*,L*) = (110,190). With the technology in problem 7, predict the pattern of trade. Explain which country is labor abundant and labor cheap. Problem 7 Draw the production diagram of the economy with the service sector in problem 4 and the manufacturing sector in problem 6. Problem 4 Sketch the cost minimization that occurs with w = $2, r = $3, c - $1, and 0.2 unit of L input. Find the unit input of capital and sketch the unit value isoquant. Describe what happens in this cost minimization if r falls to $2. Problem 6 Given factor prices w - $2 and r = $3, suppose 0.35 units of labor are used in manufacturing to produce $1 of output. Sketch the manufacturing cost minimization and the expansion path. Find KIL in manufacturing.
Consider the Hecksher-Ohlin model. Let the total endowment of capital in Home and Foreign be 30 and 20 units, respectively. Let the total endowment of labour in Home and Foreign be 20 and 10 units, respectively. Which of the statement below is true? A. If there is trade, Foreign will export the labour intensive good B. Home is capital-abundant C. Foreign is labour-abundant D. Home has comparative advantage in the labour intensive good E. There's insufficient information to discuss comparative advantage
In the Romer Model (1990), if the level of technological knowledge is 1000, productivity parameter in the R&D sector is 0.0001, and wage paid to human capital is 50, what is the price of a new design from the R&D activities? (Show calculation steps.) In the Romer Model (1990), suppose the productivity parameter in the R&D sector is 0.0001 and the stock of human capital in the economy is 5000, of which 4000 is allocated to the manufacturing of the final goods. In the final goods production sector, output elasticity with respect to labor is 0.3 and output elasticity with respect to human capital is 0.5. Find the equilibrium interest rate. (Show calculation steps.)
19) According to the Heckscher-Ohlin model, the source of comparative advantage is a country's A) factor endowments. B) technology. C) advertising. D) human capital. E) political system. Answer:
A country produces two goods: X ( X-axis) and Y ( Y-axis). When the price of x is doubled ( 2x) and the price of Y is tripled( 3x), the isovalue curve becomes steeper. true or false
Question 41 In addition to economic dimensions, globalization has_ and dimensions. O political; social clerical; art history O friendly; unfriendly chemical; biological accounting; intuitive
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This is the general instructions given. Use graphical analysis and detailed economic reasoning to interpret empirical evidence and/or to show your statements following the methods and contents of the lectures about the Factor specific model. Complete the analysis with appropriate assumptions if needed and proofs of theoretical propositions. Graphical analysis is requires to support the answer. In the (Standard) Specific Factors Model of a small open economy that initially exports good X, analyse the effects of a fall in the price of good Y, holding the price of good X constant on outputs of the goods, X and Y, the real wage of labor, the real rental price of capital in the X industry, and the quantity of X exported.
2
According to the Ricardian Model, if two nations have the same opportunity cost for cars, then they BOTH Group of answer choices cannot gain from trade in cars. They cannot both gain. Only one of them can gain at a time. still gain from trade in cars. can only gain from trade in cars if one of them reduces its wages.

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Question 3b-3 The Heckscher-Ohlin model rules out the classical model's basis for trade by assuming that is (are) identical between countries. Factor endowments Factor intensities Technology. Opportunity costs.