ssuming Lesotho has a high intensity of labour abundance whilst Swaziland has a high intensity of capital abundance. Using the production possibilities curve and

Q: Determine the opportunity cost for each nation. Determine what each nation has a comparative…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: n the Heckscher-Ohlin-Vanek model with trade a country that is labour abundant will     export the…

A: Heckscher-Ohlin-Vanek model states that trade results on account of the different relative prices of…

Q: Using the Heckscher-Ohiln trade model, we would expect that in a nation that is labor abundant that…

A: The Hecksher Ohlin theorem states that  a labor abundant nation exports labor intensive good and its…

Q: Countries A and B have two factors of production, capital and labor, with which they produce two…

A: Given,Two countries = A and BFactors of production = Capital (K) and labor (L) Two goods = X and YX…

Q: Leontief’s paradox is an example of testing a trade model using actual data observations. If…

A: To find out how the United States participates in international trade, Professor Wassily Leontief, a…

Q: Characterize the two different approaches a nation can take to achieve free trade. Does one…

A: A trade policy known as "free trade" does not impose import or export quotas. It can also be thought…

Q: True or false? Free trade causes job losses in industries in which a country does not have a…

A: International trade: - it means the buying and selling of goods and services with other countries.

Q: Saudi Arabia has huge oil reserves, but relies on the United States for oil rigs to extract the oil.…

A: Given:  Saudi Arabia has huge oil reserves.  It relies on U.S.A for oil rigs to extract the oil.

Q: Explain how two countries trading with which other gain from economic trade or mercantilism.

A: Globalization is defined as a process in which multinational firms, individuals, and governments…

Q: Trade

A: Comparative advantage refers to a situation in which a country has more specialization in one good…

Q: Answer the following questions about Comparative Advantage, Specialization and Trade. The link below…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: If the world price of oil increases, what impact will this have on the welfare of an oil importing…

A: David Ricardo is the creator of comparative advantage theory. It explains how economic advantages…

Q: Assume that Germany has 1200 units of labor available and it can produce two goods: apples and…

A: According to the theory of comparative advantage, if countries specialise in the production of goods…

Q: According to the theory of Comparative Advantage, participation in international trade will always…

A: The theory of Comparative Advantage is a fundamental concept in economics that explains the benefits…

Q: Suppose the United States can produce cars at an opportunity cost of two computers for each car it…

A: Given information: The United States produces either 2 computers or 1 car The Mexico produces…

Q: Suppose Canada can produce cars at an opportunity cost of 2 computers for each car it produces.…

A: The comparative advantage is the ability of a country to produce the commodity at the least…

Q: If a country closes off to trade and notices that the number of firms in an industry doubles in…

A: Trade patterns between countries with similar productivity and factor endowments may indeed be…

Q: Below are hypothetical production possibilities tables for New Zealand and Spain. Each country can…

A: Gains from trade specialization occurs when the total production increases if the countries produce…

Q: Choose four countries. One country in North America, another country in Central America, another…

A: Gravity Model:The gravity model is an economic concept and statistical model used to predict the…

Q: Explain which product each of the countries should specialise in and export. Use the information…

A: The theory that states that there exists an advantage when the economy could be able to produce at a…

Q: With the aid of illustration (s) explain in detail why countries push for specialization in…

A: In the theory of trade, we have two dominant theories first, The Absolute Advantage Theory by Adam…

Q: Happyland can produce 40 tones of marshmallows or 20 tones of chocolate in a year. Friendshipland…

A: The comparative advantage demonstrates the difference of opportunity cost for producing a commodity…

Q: Using the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that…

A: As per the Heckscher-Ohlin trade model, we would expect that in a nation that is labor abundant that…

Q: What is meant by gains from exchange? And by gains from specialization

A: Exchange gains show two traders with different endowments but similar preferences, earn a more…

Q: Create a diagram similar to Figure 1.4 in which demand in both countries is identical and trade…

A: International trade is the exchange of goods and services between different countries. It includes…

Q: If a country closes off to trade and notices that the number of firms in an industry doubles in…

A: The growing returns might drive trade flows between nations with similar productivity and factor…

Production Possibility Analysis

The production possibility analysis comprises the production possibility frontier (PPF), or the production possibility curve (PPC) to evaluate a society or even an economy. The production possibility curve represents the cost that the society has to incur for choosing between two different commodities. It is assumed that an economy that operates at the highest production possibility curve is known to have a better standard of living which the society can achieve for producing the optimum level of output which it can produce given a specified number of factors of production or inputs or resources.