This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the output per hourworked in Foreign and Home for each of two goods.ChocolateOlive OilHome9c = 1 pound per hour90 = 3 gallons per hourForeign= 5 pounds per hour90= 4 gallons per hourwhere:= units of chocolate produced in Home by one hour of labor;= units of olive oil produced in Home by one hour of labor;90= units of chocolate produced in Foreign by one hour of labor;= units of olive oil produced in Foreign by one hour of labor;PW= the world price of chocolate (the trade price);po= the world price of olive oil (the trade price).Both Home and Foreign will gain from trade if the world price of chocolate (PW) lies between two limits as follows:gallons>gallons>(Round each response to two decimal places.)poundpound

As per the question, Chocolate Olive Oil Home 1 3 Foreign 5 4

Answered: This exercise applies the basic…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose an economy uses only two inputs in production: capital and labour. The following table describes a production function, where y stands for output per worker and k is capital per worker.Suppose there are two countries, A and B. The economies of the two countries can be described by this production function. If Country A has initially a capital–labour ratio k = 0.167 and Country B has k = 0.412, show that an equal increase in capital produces more extra output in country A than in Country B. Explain with words (computations) + graph y k 0.000 0.000 0.173 0.030 0.302 0.091 0.408 0.167 0.480 0.231 0.535 0.286 0.577 0.333 0.612 0.375 0.642 0.412 0.667 0.444 0.688 0.474 0.707 0.500 0.724 0.524 0.739 0.545
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Suppose Nation B has 8,623 labor hours each year to produce burgers and fries. Burgers take 13 hours to produce each, and fries take 7 hours to produce each. Suppose Nation B also sees a sudden surge in working-age immigrants, leading to 26% higher labor hours each year. What is the maximum number of fries is Nation B able to produce in a year after this surge of immigration? Round your answer to one place after the decimal point (0.1).
The biological relationship between the growth for the fish population and the size of the fish population is g = 12S(1 - S/4) where g is the growth of the fish population and S is the size of the population. The size of the harvest is a function of the amount of human effort expended b = 3ES where E is the level of effort. Market price of fish per unit is $100 and a constant marginal cost of effort is $40. We can derive the free-access equilibrium effort level Ef by setting the net benefits function equal to zero. Then, E f = in one decimal place. Hint: Write the number
Assume a Heckscher-Ohlin model. Home and Foreign produce food (F) and machinery (M) using labor (L) and capital (K) as the unique inputs in both sectors. Both countries face the same technologies. In both countries the input requirements are fixed at akf = 2, aLF = 1, aKM = 2, and aLM = 3 (i.e., 3 units of labor are required to produce one unit of machinery etc.). Home is endowed with K = 800 units of capital-hours and L= 600 units of labor-hours. Foreign is endowed with K* = 600 units of capital-hours and L* = 400 units of labor-hours. The output of food is denoted by QF. The output of machinery is denoted by QM- a) Determine Home's capital constraint. Home's capital constraint is b) Which of the two goods is capital-intensive in the production? is capital-intensive. c) Which output mix will be realized in Home if it uses all its resources? The optimal output mix is units of food and units of machinery. d) Which good will be exported by Home? Home will export
Consider a country in which there are two sectors, called Sector a and Sector b. The production function of the two sectors are: Y₁ = (La)ª, and Y₁ = (L₁)¤ with 0 ≤ a ≤ 1 and with La as the number of workers employed in sector a and L, as the number of workers employed in sector 6. The total number of workers in the economy is: The only difference between the sectors is that in sector a workers are paid their marginal dy, whereas in sector 6, workers are paid their average product product Y₂ dLa La Workers can move freely between the sectors and they do so until wages are equal. In this case, the value of La is: La O La Labor misallocation and efficiency 1 = 1+a¹/(a) La 1-a = 1+a¹/(a−1) a 1+a¹/(a−-1) ● La = 1+al/(a-1) α 1+a¹/(a) = = 1 = La + Lb Save Answer
The input-output matrix for a simplified economy with just three sectors (natural resources, manufacturing, and trade and services) is given below. Natural Resources Manufacturing Trade and Services 0.1045 0.0428 0.0028 0.0825 0.1086 0.0584 0.0868 0.1019 0.2031 Natural Resources Manufacturing Trade and Services Suppose the demand (in millions of dollars) matrix is the matrix D, shown below. Find the amount each sector should produce. 450 D= 301 126 Production levels of units from natural resources, services are needed. (Round to the nearest whole number as needed.) units from manufacturing, and units from trade and
Question-3 Consider the figure below which shows the combined production function of Anna and Bob: Wheat (bushels) A Free-time (hours) [slope at A = slope at y] a) Assume a case where Anna works the land owned by Bob. By referring to the diagram above, explain how does Anna rank the possible allocations marked as X, Y, Z and A? b) Now assume a separate case whereby Anna is a slave to Bob. It is also given that Anna recently suffered from Corona virus and thus her nutrition needs are amplified- for more hours of work that she puts in, she requires more bushels of wheat, even just to survive. Draw a modified version of the diagram above to depict how Anna's biological survival constraint change in this case and also comment with brief reasoning whether Anna would be better off on her altered biological survival constraint compared to before? c) Suppose a new scenario where the Government has introduced a new social welfare program to cater to the poor of the society, wherein the…
Question 1: Assume a firm wants to achieve an output level of 5400 units. This is the firm's production for that level of production: 5400 25K0.6 L0.4 Where Kis capital inputs and Lis labor inputs. Answer a) Yes or no, is this a level curve? b) what is dK2 dL
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