Question

Can you please help me with part e and F of this question

ome has 1200 units of L and Foreign has 3600 of units of L available. Both countries can produce coffee and cloth. The unit labour requirements for coffee and cloth in Home is 4 and 2 respectively. Likewise, it is 16 and 4 in Foreign. a. Write the equation and graph the PPF for both Home and Foreign. b. Which country has absolute advantage? Justify c. In which good does Home have a comparative advantage? Justify d. Construct the world RS curve. e. If there is free trade between the two countries, find equilibrium relative price of coffee, given Demand for Coffee/Demand for Cloth = Price of Coffee/Price of Cloth). f. Show pattern and gains from trade. image.png

0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Can you please help me with part e and F of this question
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • E and F please 1. (16 points) Answer the following questions based on the information in...

    E and F please 1. (16 points) Answer the following questions based on the information in the table below. U.S.U.K. Wheat (bushels/hr) 9 3 Cloth (yards/hr) 6 6 A. (2 points) Which country has an absolute advantage in wheat? Which country has an absolute advantage in cloth? Can mutually beneficial trade take place between U.S. and U.K. according to the law of absolute advantage? B. (2 points) What is the opportunity cost of wheat in each country? c. (2 points)...

  • These questions are about international trade. I want to know the answers. 5 Heckscher-Ohlin Model. Suppose...

    These questions are about international trade. I want to know the answers. 5 Heckscher-Ohlin Model. Suppose the production of cloth is labour intensive and the production of food is land intensive and suppose the United States (US) is labour abundant and Canada is land abundant. (a) Show how the US production possibility frontier (PPF) differs from the Canadian PPF. Briefly explain. (Use the general version of the PPF's) (b) Which country will have the lower price of cloth Pc relative...

  • Question 144 pts Dutch Disease is associated with a dramatic decline in the demand for a...

    Question 144 pts Dutch Disease is associated with a dramatic decline in the demand for a primary commodity produced by a country. True False Flag this Question Question 154 pts The Heckscher-Olin model uses differences in factor abundance to determine whether any nation has a comparative advantage in any good. True False Flag this Question Question 164 pts According to the Ricardian model, the source of comparative advantage is: differences in the fields of research and development in a country....

  • Consider two countries that produce cloth and widgets with labour as the unique production factor using...

    Consider two countries that produce cloth and widgets with labour as the unique production factor using a linear technology. Given the following information: Unit Produced by One Worker/Hour Cloth Widgets Home 200 400 Foreign 120 60 i. What is the opportunity cost of cloth in terms of widgets for the Home country? For the Foreign country? (5 points) ii. In which good does the Home country have comparative advantage? Why? (5 points) ii. Assume that on the world market one...

  • 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...

  • 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...

  • 5- (Table: Home and Foreign Prices for Manufacturing and Agriculture) Consider the information provided about the price...

    5- (Table: Home and Foreign Prices for Manufacturing and Agriculture) Consider the information provided about the price of agriculture and manufacturing goods in two countries (Home and Foreign). If the two countries open their markets for trade, then Home Foreign S5 S3 S7 Pa S3 Pa A) Home has the comparative advantage in agriculture. B) Home has the comparative advantage in manufacturing. C) Foreign has absolute advantage in both goods. D) Foreign has a comparative advantage in manufacturing. 5- (Table:...

  • 10 ( 1JW al questions) 01. (20 marks) Assume a Ricardian model. Home needs 3 units...

    10 ( 1JW al questions) 01. (20 marks) Assume a Ricardian model. Home needs 3 units of labour to pro food and 2 units of labour to produce a unit of cloth home needs 3 units of labour to produce a unit of units of labour to produce a unit of clothes. The foreign country needs 3 unit of labour to produce a unit of food and 1 unit of labou oduce a unit of food and 1 unit of...

  • Unit Labor Requirements Cloth Widgets Home 20 10 60 Foreign 30 11) Given the information in...

    Unit Labor Requirements Cloth Widgets Home 20 10 60 Foreign 30 11) Given the information in the table above A) neither country has a comparative advantage in cloth B) Home has a comparative advantage in cloth. C) Foreign has a comparative advantage in cloth. D) Home has a comparative advantage in both cloth and widgets. E) neither country has a comparative advantage in widgets. 12) Given the information in the table above, if wages were to double in Home, then...

  • 6. Suppose that both Home and Foreign move from autarky to a free-trade regime and the...

    6. Suppose that both Home and Foreign move from autarky to a free-trade regime and the trade price of product X is 0.4Y. From the Hone perspective, the trade price is than the marginal cost of product X, which isSo, the Home economy under free trade. So, the X industry must A) smaller; 0.5Y; exit B) greater; 0.5Y; overtake C) smaller; 0.25Y; exit D) greater; 0.25Y; overtake 1. Again, suppose that both Home and Foreign move from autarky to a...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT