There are two countries Home and Foreign Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign has a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. Suppose world relative demand takes the following form: Demand for apples/demand for bananas price of bananas/price of apples 1.) Using the 3-point curved line drawing tool, draw the relative demand curve on the graph to the night. Label the curve RD. Now suppose that instead of 1,200 workers, Home had 2,400. The relative supply curve (RS) would shift to the right (as shown by RS,) 2) Using the point drawing tool, indicate the new equilibrium relative price of apples. Label this point EQ. Carefully follow the instructions above and only draw the required objects. Relative price of apples Pa/Pb RS do 2007 0.25 0.5 0.75 RS, NO 125 15 175 Relative quantity of apples dda

There are two countries Home and Foreign Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Foreign has a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. Suppose world relative demand takes the following form: Demand for apples/demand for bananas price of bananas/price of apples 1.) Using the 3-point curved line drawing tool, draw the relative demand curve on the graph to the night. Label the curve RD. Now suppose that instead of 1,200 workers, Home had 2,400. The relative supply curve (RS) would shift to the right (as shown by RS,) 2) Using the point drawing tool, indicate the new equilibrium relative price of apples. Label this point EQ. Carefully follow the instructions above and only draw the required objects. Relative price of apples Pa/Pb RS do 2007 0.25 0.5 0.75 RS, NO 125 15 175 Relative quantity of apples dda

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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