Question

respectively. [Here you have to use the CORREL command in Excel]. DO NOT ATTACH YOUR DATA TECHNICAL ANALYSIS For technical analysis, you need to follow Step 4. Step 4. In order to conjecture the circumstances in these two countries under autarky (when there is no trade), consider the following hypothetical scenario based on Ricardian model. Assume throughout that those two countries (Italy and Sweden) are the only two countries in the world, at least for purposes of trade. There are two goods: shoes and calculators. Consumers in both countries always spend half of their income on shoes and half of their income on calculators. The only factor of production is labour. Each Italian worker can produce 1 shoe or 2 calculators per unit of time. Each Swedish worker can produce 4 shoes or 2 calculators per unit of time. There are 80 workers in Italy and 60 workers in Sweden. You need to provide conditions in each country by stating: a) Which country has an absolute advantage in shoes? In calculators? b) Which country has a comparative advantage in shoes? In calculators? c) Draw the production possibility frontier for each country and indicate slope (put shoes on the vertical axis and calculators on the horizontal axis). of calculators divided by the price of shoes). autarky? d) Find the autarky relative price of calculators in both countries (i.e., the price e) What is the optimal consumption and production for each country under PRESENTATION OF RESULTS You need to provide a brief in order to effectively communicate your findings. In your V. uet have the following ingredients:

Answer 1