Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 1, Problem 6SCQ
Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram onto a sheet of paper and then add a foreign county as a third agent. Draw a rough sketch of the flows of imports, exports, and the payment for each on your diagram.
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For the first part I have drawn a graph but now it is wanting a graph drawn in U.S dollars showing clearly the price that the US importers (the buyers) pay and the quantity of trade that will occur. I have attached my first graph I have made along with the equations given. But I do not understand how to make this graph.
Question
Match the term to its correct definition.
Column A
1.
2.
3.
4.
5. f
6.
Asia-Pacific Economic Cooperation (APEC)
European Union
International Trade Agreements
North American Free Trade Agreement (NAFTA)
O a
O b
O c
Od
Protectionism
United Nations (UN)
What happens when a nation's currency depreciates?
Its products become cheaper to other nations.
Its trade decreases.
Its trade increases.
Its products become more expensive to other nations.
Question 3 (1 point)
Column B
a. A trade agreement between the United States, Mexico,
and Canada established in 1994 and renegotiated as the
United States-Mexico-Canada agreement.
b. A political and diplomatic organization established to
promote economic and social cooperation between
nations.
c. Multinational agreements on trade conditions.
d. A political and economic union of European states.
e. An economics forum consisting of 21 countries in the
Asia-Pacific region.
f. The concept of protecting a country's domestic industries
from foreign…
In the Heckscher-Ohlin model, suppose the two factors of production are: high-skilled labor (H) and regular labor (L). The two sectors are manufacturing and business services. Manufacturing uses regular labor more intensively, and business services uses high-skilled labor more intensively. The two countries are the U.S. and China, and the U.S. has a comparative advantage in business services.
a. Illustrate the effect of opening up to trade on the U.S. with the PPF and indifference curve diagram. Make sure you clearly label everything. What happens to the relative price of business services in the U.S.? Show clearly the gains from trade.
b. What happens to the relative wage of high-skilled labor? Does inequality (the skill premium) increase? Show all work and explain.
2. Evidence for or against Heckscher-Ohlin model
Leontieff Paradox
i. Briefly describe the paradoxii.We discussed several explanations for the paradoxical result in class. Briefly
describe two explanations.
Inequality…
Chapter 1 Solutions
Principles of Economics 2e
Ch. 1 - What is scarcity? Can you think of two causes of...Ch. 1 - Residents of the town of Smithfield like to...Ch. 1 - A consultant works for 200 per hour. She likes to...Ch. 1 - A computer systems engineer could paint his house,...Ch. 1 - What would be another example of a system in the...Ch. 1 - Suppose we extend the circular flow model to add...Ch. 1 - What is an example of a problem in the world...Ch. 1 - The chapter defines private enterprise as a...Ch. 1 - Why might Belgium, France, Italy, and Sweden have...Ch. 1 - Give the three reasons that explain why the...
Ch. 1 - What are three reasons to study economics?Ch. 1 - What is the difference between microeconomics and...Ch. 1 - What are examples of individual economic agents?Ch. 1 - What are the three main goals of macroeconomics?Ch. 1 - How did John Mayhem Keynes define economics?Ch. 1 - Are households primarily buyers or sellers in the...Ch. 1 - Are firms primarily buyers or sellers in the goods...Ch. 1 - What are the three ways that societies can...Ch. 1 - What is globalization? How do you think it might...Ch. 1 - Suppose you have a team of two workers: one is a...Ch. 1 - Why would division of labor without trade not...Ch. 1 - Can you think of any examples of free goods, that...Ch. 1 - A balanced federal budget and a balance of trade...Ch. 1 - Macroeconomics is an aggregate of what happens at...Ch. 1 - Why is it unfair or meaningless to criticize a...Ch. 1 - Suppose, as an economist, you are asked to analyze...Ch. 1 - Why do you think that most modern countries...Ch. 1 - Can you think of ways that globalization has...
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