This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the unit labor requirements in Foreign and Home for each of two goods. Whiskey Cheese Home aLC = 1 hour per pound = aLW 3 hours per gallon Foreign aLC = 5 hours per pound aLw * aLC aLW = 4 hours per gallon = number of labor hours needed to produce a unit of cheese in Home; number of labor hours needed to produce a unit of whiskey in Home; = number of labor hours needed to produce a unit of cheese in Foreign; where: aLC = number of labor hours needed to produce a unit of whiskey in Foreign; aLW Pc =the absolute or money price of cheese on world markets; Pw =the absolute or money price of whiskey on world markets. As long as the world equilibrium relative price (PC/Pw) lies between 0.33 and 1.25 gallons, the two countries will specialize, with all Home workers producing cheese In the post-trade equilibrium the wage of workers in Home relative to the wage of workers in Foreign will lie between A. 1.33 and 5. OB. 0.2 and 5. OC. 0.75 and 1.33. OD. 1 and 4.

This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the unit labor requirements in Foreign and Home for each of two goods. Whiskey Cheese Home aLC = 1 hour per pound = aLW 3 hours per gallon Foreign aLC = 5 hours per pound aLw * aLC aLW = 4 hours per gallon = number of labor hours needed to produce a unit of cheese in Home; number of labor hours needed to produce a unit of whiskey in Home; = number of labor hours needed to produce a unit of cheese in Foreign; where: aLC = number of labor hours needed to produce a unit of whiskey in Foreign; aLW Pc =the absolute or money price of cheese on world markets; Pw =the absolute or money price of whiskey on world markets. As long as the world equilibrium relative price (PC/Pw) lies between 0.33 and 1.25 gallons, the two countries will specialize, with all Home workers producing cheese In the post-trade equilibrium the wage of workers in Home relative to the wage of workers in Foreign will lie between A. 1.33 and 5. OB. 0.2 and 5. OC. 0.75 and 1.33. OD. 1 and 4.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What is the AVC and MC?
Name and describe twofinancial intermediaries
Prepare a flow chart for a typical family of 4 (3 drivers), taking a two-week (Monday is 1st-14th is a Sunday) vacation driving from New York to Orlando in August. Your return to workday is 15th of the month which is a Monday. Discuss areas of concerned revealed by the flow chart.
How is the time value of money a sophisticated concept?
What are the ethical issues that could be encountered when running an e-commerce platform?
compare and contrast Mom's Touch and Burger King Contrast food quality, service, facilities, cost, convenience, business model, cleanliness, location 1700 words
Please help Why is basic understanding of global geography important? Just q&a DO NOT COPY FROM OTHER WEBSITES Upvote guarenteed for a correct and detailed answer. Thank you!!!
Explain the concept of the time value of money?
can you do part b, c, d and e i can hse 4 questions for it
8. Take home pay for Americans drops 3 month in a row 9. Nationwide Fad: The Awesome Burger 10. Price of grills increases and threatens memorial day cookouts | 在