5 4. Resolution of the Leontief paradoxThe factor-endowment theory predicts that because the United States is relatively abundant in capital and relatively scarce in labor, it will exportcapital-intensive goods, and its import-competing goods will be labor intensive. In the 1950s, Wassily Leontief, a Russian-American economist, testedthis proposition by analyzing the capital/labor ratios of export industries and import-competing industries, using U.S. data. He found that thecapital/labor ratio for U.S. export industries was lower than that of the United States' import-competing industries, which means that U.S. exportswere less capital intensive than import-competing goods. These findings appeared to contradict the predictions of the factor-endowment theory andbecame known as the Leontief paradox.Replicate Leontief's test using the data shown in the following table. Compute the capital/labor ratio for exports and imports, and enter each value inthe last column of the table.Used to Produce $1 Million Worth of....ExportsImportsCapital(Dollars)1,600,0001,500,000The numbers in the previous table show that U.S. exports areWhat do the results of your test illustrate? Check all that apply.The Leontief paradoxD The Heckscher-Ohlin theoryLabor(Person-years)80100Capital/Labor Ratio(Dollars per person-year)and U.S. imports areWhich of the following explanations resolve the Leontief paradox? Check all that apply.Leontief calculated capital/labor ratios for exports and imports, while the Heckscher-Ohlin model compares labor/capital ratios.Leontief did not distinguish between skilled and unskilled labor.Leontief wrongly assumed that the United States was abundant in labor.Leontief's test focused on labor and capital only, ignoring other factors of production. 4. Resolution of the Leontief paradoxThe factor-endowment theory predicts that because the United States is relatively abundant in capital and relatively scarce in labor, it will exportcapital intensive goods, and its import-competing goods will be labor intensive. In the 1950s, Wassily Leontief, a Russian-American economist, testedthis proposition by analyzing the capital/labor ratios of export industries and import-competing industries, using U.S. data. He found that thecapital/labor ratio for U.S. export industries was lower than that of the United States' import-competing industries, which means that U.S. exportswere less capital intensive than import-competing goods. These findings appeared to contradict the predictions of the factor-endowment theory andbecame known as the Leontief paradox.Replicate Leontief's test using the data shown in the following table. Compute the capital/labor ratio for exports and imports, and enter each value inthe last column of the table.CapitalUsed to Produce $1 Million Worth of.... (Dollars)1.600.0001,500,000ExportsImportsThe numbers in the previous table show that U.S. exports are.The Leontief paradoxThe Heckscher-Ohlin theoryLabor(Person-years)80100Capital/Labor Ratio(Dollars per person-year)neither labor nor capital intensiveWhat do the results of your test, illustrate? Check all that apply both labor and capital intensivecapital intensivelabor intensiveand U.S. imports are4Which of the following explanations resolve the Leontief paradox? Check all that applyLeontief calculated capital/labor ratios for exports and imports, while the Heckscher-Ohlin model compares labor/capital ratios.Leontief did not distinguish between skilled and unskilled labor.Leontef wrongly assumed that the United States was abundant in laborLeonbef's test focused on labor and capital only, ignoring other factors of production.

Here in this situation, the question is talking about Resolution of the Leontief paradox The factor…

Replicate Leontief's test using the data shown in the following table Compute the capital/labor ratio for exports and imports, and enter each value in the last column of the table. Used to Produce $1 Million Worth of... Exports Imports Capital (Dollars) 1.600,000 1,500,000 The numbers in the previous table show that U.S. exports are What do the results of your test, illustrate? Check all that apply. The Leontief paradox D The Heckscher-Ohlin theory Labor (Person-years) 80 100 Capital/Labor Ratio (Dollars per person-year) Y and U.S. imports are

Replicate Leontief's test using the data shown in the following table Compute the capital/labor ratio for exports and imports, and enter each value in the last column of the table. Used to Produce $1 Million Worth of... Exports Imports Capital (Dollars) 1.600,000 1,500,000 The numbers in the previous table show that U.S. exports are What do the results of your test, illustrate? Check all that apply. The Leontief paradox D The Heckscher-Ohlin theory Labor (Person-years) 80 100 Capital/Labor Ratio (Dollars per person-year) Y and U.S. imports are

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. Assume the bar owner has the right to hire as many bands as she likes. Iftransaction costs were $90, split between the bar owner and the tenants, how manybands would play? What would social welfare be? A. Three bands would play and social welfare would be ‐100.B. Two bands would play and social welfare would be 75.C. Two bands would play and social welfare would be ‐15.D. No bands would play and social welfare would be 0.E. Three bands would play and social welfare would be ‐190
There is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. If the tenants have the right to be free of loud music enforced through aproperty rule, how many bands will play in Rock‐n‐Roll Bar on a Saturday night? A. ZeroB. OneC. TwoD. ThreeE. It depends on transaction costs
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