Homework Answers
Answering only first Four parts as HOMEWORKLIB RULES rule.
unit labor requirement table :
| Home H | foreign f | |
| Food F | 3 | 3 |
| Clothes C | 2 | 1 |
| Labor supply | 1200 | 800 |
A) now country with lower Opportunity cost will have Comparative advantage in that good
So (aLF/aLC) = (3/2) < (aLF/aLC)* = 3
So Home has Comparative advantage in Food
.
b) foreign f has Comparative advantage in Clothes
.
c) PF/PC in home = Opportunity cost of production of F in Home
= 3/2 = 1.5
Relative price of F in foreign = 3/1 = 3
.
d) PPF , home ;
Max F = 1200/3 = 400, max C = 1200/2 = 600
graph, F on X axis, C on Y axis ,
slope of PPF = 6/4 = 3/2
foreign f
max F = 800/3, max C = 800/1 = 800
slope of ppf = 3
e) world supply Curve :
Add Answer to:
10 ( 1JW al questions) 01. (20 marks) Assume a Ricardian model. Home needs 3 units...
Answer question 4 based on previous information. 1. Suppose that each worker in the home country...
Answer question 4 based on previous information.
1. Suppose that each worker in the home country can produce three loaves of bread or two shirts. Assume that Home has four workers a. Graph the production possiblities frontier for the Home country. b. What is the no-trade relative price for bread at Home? 2. Suppose that each worker in the Foreign country can produce two loaves of bread or three shirts. Assume that Foreign also has four workers. a. Graph the...
1a. Suppose that each worker in Home can produce 2 pound of cheese or 3 gallons...
1a. Suppose that each worker in Home can produce 2 pound of cheese or 3 gallons of wine. Assume that Home has 40 workers. a. Graph the production possibilities frontier (PPF) for Home? What is the no-trade relative price of cheese in Home? Why? b. Suppose that each worker in Foreign can produce 1 pounds of cheese or 2 gallons of wine. Assume that Foreign also has 40 workers. Graph the PPF for Foreign? What is the no-trade relative price...
Home Fareign Cheese Wine Labor Force 100 200 Several questions require drawing graphs. In these cases...
Home Fareign Cheese Wine Labor Force 100 200 Several questions require drawing graphs. In these cases you should graph carefully, either using graph paper à computer, or if you graph by hand, a ruler to show exact amaunts an the vertical and horizantal axes à. Whith country has an absolute advantage in producing cheese? Which country has an absolute advantage in producing wine? b. Whith country has a comparative advantage in producing cheese? Which country has a comparative advantage in...
International trade
Problem 1 BICYCLES SKATEBOARDS HOME 5(hrs) 2(hrs) FOREIGN 3(hrs) 3(hrs) HOME has 1000 hours of labour available.FOREIGN has 1200 hours of labour available.a. Draw the production possibility frontier for Home and Foreign. b. In the absence of trade, what is the relative price of bicycles in terms of skateboards in each country? c. Draw the world production possibility frontier clearly showing the case of specialization in comparative advantage and comparative disadvantage. d. Trade is said to make each country better off by enlarging the...
Problem 1 A country (”Home”) is populated with 300 workers who produce either food (F) and/or...
Problem 1
A country (”Home”) is populated with 300 workers who produce
either food (F) and/or clothing (C). Each food worker produces 6
units of food and each clothing worker produces 3 units of
clothing. The preferences of the consumers over food and clothing
are represented by the utility function: u(DF ,
DC) = (DF ) 2/3 (DC)
1/3
1) Assuming that at the optimum, consumers set their marginal
rate of substitution, MRSDF ,DC , to the relative price,
i.e.,...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work out the effects of the following changes (one at a time) on the Home and Foreign terms of trade and welfare. Assume that two goods, Food and Cloth, are produced and consumed, Home country has a comparative advantage in Food, and that in the initial equilibrium, both countries specialize completely. Assume that preferences are identical and homothetic in the two countries. (a) A decrease...
Consider two countries Home and Foreign that can produce two goods, apples and bananas, using labour...
Consider two countries Home and Foreign that can produce two goods, apples and bananas, using labour as the sole production factor. Home and Foreign have, respectively, 2400 and 1600 units of labour available and the unit labour requirements in the production of both goods are as shown in the following table: Home Foreign Apple 6 hours 10 hours Bananas 4 hours 2 hours 1. Construct the world relative supply curve and graph the relative demand curve along with the relative...
3. Home has 1.200 units of labor available. It can produce two goods, apples and bananas....
3. 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 800 units of labor available. Foreign's unit labor requirement in apple production is 5. while in banana production it is 1. a Graph the production possibility frontier for Home and the production possibility frontier for Foreign Please put Apples on the y axis. Now suppose world...
With the assumptions of the Ricardian model, suppose the Home Country can produce 100 clothes, utilizing...
With the assumptions of the Ricardian model, suppose the Home Country can produce 100 clothes, utilizing 25 workers when completely specialized, while the Foreign Country can produce 100 clothes, utilizing 20 workers when completely specialized. In this case, each country gains 1 additional unit of labor, which country gains more in the production of clothes from that additional unit and why? (H=Home, F=Foreign, C=Clothes) The Foreign Country; because the MPL of clothes in foreign=5 The Home and Foreign Country gain...
(a) Draw the PPF for Home and for Foreign (on separate graphs). Put production of food...
(a) Draw the PPF for Home and for Foreign (on separate graphs).
Put production of food on the x-axis. 5 (b) Which country has the
comparative advantage in food production? Which has the comparative
advantage in drink production? (c) Draw the world supply of food
relative to drinks (the world relative supply curve) (d) Suppose
that the PF ood = $2/pound, and PDrinks = $5/gallon. Draw new PPFs
for Home and Foreign after trade is allowed. How can we tell...
Answer question 4 based on previous information.
1. Suppose that each worker in the home country can produce three loaves of bread or two shirts. Assume that Home has four workers a. Graph the production possiblities frontier for the Home country. b. What is the no-trade relative price for bread at Home? 2. Suppose that each worker in the Foreign country can produce two loaves of bread or three shirts. Assume that Foreign also has four workers. a. Graph the...
Home Fareign Cheese Wine Labor Force 100 200 Several questions require drawing graphs. In these cases you should graph carefully, either using graph paper à computer, or if you graph by hand, a ruler to show exact amaunts an the vertical and horizantal axes à. Whith country has an absolute advantage in producing cheese? Which country has an absolute advantage in producing wine? b. Whith country has a comparative advantage in producing cheese? Which country has a comparative advantage in...
Problem 1
A country (”Home”) is populated with 300 workers who produce
either food (F) and/or clothing (C). Each food worker produces 6
units of food and each clothing worker produces 3 units of
clothing. The preferences of the consumers over food and clothing
are represented by the utility function: u(DF ,
DC) = (DF ) 2/3 (DC)
1/3
1) Assuming that at the optimum, consumers set their marginal
rate of substitution, MRSDF ,DC , to the relative price,
i.e.,...
Question 1 Use the 2-country Ricardian model with free trade (graphically, using standard graphs) to work out the effects of the following changes (one at a time) on the Home and Foreign terms of trade and welfare. Assume that two goods, Food and Cloth, are produced and consumed, Home country has a comparative advantage in Food, and that in the initial equilibrium, both countries specialize completely. Assume that preferences are identical and homothetic in the two countries. (a) A decrease...
Consider two countries Home and Foreign that can produce two goods, apples and bananas, using labour as the sole production factor. Home and Foreign have, respectively, 2400 and 1600 units of labour available and the unit labour requirements in the production of both goods are as shown in the following table: Home Foreign Apple 6 hours 10 hours Bananas 4 hours 2 hours 1. Construct the world relative supply curve and graph the relative demand curve along with the relative...
3. 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 800 units of labor available. Foreign's unit labor requirement in apple production is 5. while in banana production it is 1. a Graph the production possibility frontier for Home and the production possibility frontier for Foreign Please put Apples on the y axis. Now suppose world...
(a) Draw the PPF for Home and for Foreign (on separate graphs).
Put production of food on the x-axis. 5 (b) Which country has the
comparative advantage in food production? Which has the comparative
advantage in drink production? (c) Draw the world supply of food
relative to drinks (the world relative supply curve) (d) Suppose
that the PF ood = $2/pound, and PDrinks = $5/gallon. Draw new PPFs
for Home and Foreign after trade is allowed. How can we tell...
Most questions answered within 3 hours.
-
probability can be expressed both as proportion and percentage
true or false?
asked 30 minutes ago -
Im trying to create a function in C where it takes an array and
size and...
asked 17 minutes ago -
what is the difference between a Lexeme and a Token? what do
each represent?
asked 47 minutes ago -
Due to the inverse square law, the image at the margin of the
x-ray film will...
asked 1 hour ago -
Please use JAVA
Create an additional drawing panel at least 400 x 400. On it,
draw...
asked 1 hour ago -
Write a MATLAB® script to Find the roots of the following
equation
?? ? ? +...
asked 1 hour ago -
2) Consumer Reports recently compared how advanced
safety technologies affect the cost of car repairs.
Basic...
asked 1 hour ago -
You're pulling on a stationary object on the ground via a rope
connected to it. What...
asked 2 hours ago -
Write a java program that plays the popular scissor-rock-paper
game. (A scissor can cut a paper,...
asked 5 hours ago -
Accrued salaries payable of $10,000 were not recorded
at December 31, 2018 and expensed in 2019.....
asked 5 hours ago -
Rank the following reagents in order of pH, lowest to highest.
Assume they are all soluble...
asked 5 hours ago -
Consider the following scenario: • Let P(C) = 0.2 • Let P(D) =
0.3 • Let...
asked 6 hours ago