Suppose there are 4 different products in a Ricardian world: apples, broccoli, beans and leather. The table below shows unit labour requirements in the North and South for each product: a North South Apples 3 4 Broccoli 3 4 Beans 3 5 Leather 3 8 Assume the wage in the South equals $10 and the wage in the North equals $20. a) Create a table similar to the table above reporting the marginal product of labor for each good and country. Explain how you derive these values. b) Which goods will the North export? Which will the South export? Explain. c) What would be the minimum tariff that makes countries prefer not to trade? Explain your answer.
Suppose there are 4 different products in a Ricardian world: apples, broccoli, beans and leather. The table below shows unit labour requirements in the North and South for each product: a North South Apples 3 4 Broccoli 3 4 Beans 3 5 Leather 3 8 Assume the wage in the South equals $10 and the wage in the North equals $20. a) Create a table similar to the table above reporting the marginal product of labor for each good and country. Explain how you derive these values. b) Which goods will the North export? Which will the South export? Explain. c) What would be the minimum tariff that makes countries prefer not to trade? Explain your answer.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Economics
Suppose there are 4 different products in a Ricardian world: apples, broccoli, beans and
leather. The table below shows unit labour requirements in the North and South for each
product:
a
North
South
Apples
3
4
Broccoli
3
4
Beans
3
5
Leather
3
8
Assume the wage in the South equals $10 and the wage in the North equals $20.
a) Create a table similar to the table above reporting the marginal product of labor for
each good and country. Explain how you derive these values.
b) Which goods will the North export? Which will the South export? Explain.
c) What would be the minimum tariff that makes countries prefer not to trade? Explain
your answer.
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