Homework Answers
57. a) (w/r)A<(w/r)B; (w/r)A will rise and (w/r)B will fall
58. a) higher; capital intensive
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57. In a two-country world, if country A is the relatively labor-abundant and country B is the relatively capital-a...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade takes place in accordance with the Heckscher-Ohlin theorem, what would be the consequence for factor prices (w/r) in the two countries? a. (w/r) rises in A and falls in B b. (w/r) rises in A and also rises in B c. (w/r) falls in A and rises in B d. (w/r) falls in A and also falls in B 48. Which one of the...
Heckscher-Ohlin model Country A produces cellphone (C) and food (F) with capital and labor. Both sectors...
Heckscher-Ohlin model Country A produces cellphone (C) and food (F) with capital and labor. Both sectors are perfect competitive. Capital (K) and labor (L) are not substitutable with each other. Thus, unit capital requirement and unit labor requirement are fixed. ??? = 3, ??? = 1, ??? = 2, ??? = 4, where ??? is the number of units of K-capital required to produce and unit of C-cellphone. a. Which sector is relatively capital intensive? Which sector is relatively labor...
60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then,...
60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then, as the movement to trade takes place, the capital/labor ratio used in the country's export industry will _and the capital/labor ratio used in the country's import-competing industry a. increase; will decrease b. increase; also will increase c. decrease; also will decrease d. decrease; will increase
will have a production possibility In the Heckscher-Ohlin model, the country with the relative abundance of...
will have a production possibility In the Heckscher-Ohlin model, the country with the relative abundance of frontier that is biased toward the production of the good. Select one: O A. land; labor intensive O B. land; capital intensive C. labor; capital intensive O D. labor; labor intensive In the Heckscher-Ohlin, gains from international trade come from Select one: A. the increased wages. O B. the improvement in technology. C. the increasing on the consumption choices available to consumers. D. the...
Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country His relatively labor abundant, then...
Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country His relatively labor abundant, then once trade begins: c. wage/rent ratio rises in H wage/rent ratio falls in H wage/rent ratio remains constant in H. None of the above.
India is labour (L) abundant and the US is capital (K) abundant. The cut diamonds (C)...
India is labour (L) abundant and the US is capital (K) abundant. The cut diamonds (C) Industry is L intensive while washing machines (W) manufacturing is K-intensive. If India and the US start trading with each other, then under the assumptions of the Heckscher-Ohlin Model: O Pc/Pw will rise in both countries. Pc/Pw will fall in India but rise in the US. e Pc/Pw will rise in India but fall in the US. Pc/Pw will fall in both countries.
61 Suppose that we are in a two-factor, two-country world where the factors of production are...
61 Suppose that we are in a two-factor, two-country world where the factors of production are labor (L) and land (T), the returns to the factors are the wage rate (w) and the rental rate on land (t), and the countries are country A and country B. In this situation, country A is land-abundant relative to country B by the physical definition of relative factor abundance if price (or economic) definition if _, and country A is land-abundant relative to...
Production of TVs are relatively capital intensive, and tennis racquets are relatively labor intensive. Suppose Canada...
Production of TVs are relatively capital intensive, and tennis racquets are relatively labor intensive. Suppose Canada has $20 billion of capital and 30 million workers and Mexico has $15 billion of capital and 10 million workers. According to the Heckscher-Ohlin(-Samuelson) model: Canada will import TVs and import tennis racquets. Canada will export TVs and import tennis racquets. Canada will import TVs and export tennis racquets. Canada will export TVs and export tennis racquets.
59. The "magnification effect" refers to the fact that, when a country is opened to trade, a. the price of the expo...
59. The "magnification effect" refers to the fact that, when a country is opened to trade, a. the price of the export good rises. b. real income is magnified even though the PPF does not change. c. the price of the abundant factor rises faster than does the price of the export good. d. the price of the scarce factor rises. 60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then, as the movement...
2. Use the Heckscher-Ohlin model to consider the production of hand-made pottery and silicon microchips in...
2. Use the Heckscher-Ohlin model to consider the production of hand-made pottery and silicon microchips in the UK and India. (a) Which country would you expect to be relatively labor abundant, and which relatively capital abundant? Why? (b) Which industry would you expect to be relatively labor intensive, and which capital intensive? Why? (c) Given your answers to (a) and (b), draw PPFs for each country. Assuming preferences are the same, add indifference curves and relative autarky price lines. What...
47. If relatively capital-abundant country A opens trade with relatively labor-abundant country B and the trade takes place in accordance with the Heckscher-Ohlin theorem, what would be the consequence for factor prices (w/r) in the two countries? a. (w/r) rises in A and falls in B b. (w/r) rises in A and also rises in B c. (w/r) falls in A and rises in B d. (w/r) falls in A and also falls in B 48. Which one of the...
60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then, as the movement to trade takes place, the capital/labor ratio used in the country's export industry will _and the capital/labor ratio used in the country's import-competing industry a. increase; will decrease b. increase; also will increase c. decrease; also will decrease d. decrease; will increase
will have a production possibility In the Heckscher-Ohlin model, the country with the relative abundance of frontier that is biased toward the production of the good. Select one: O A. land; labor intensive O B. land; capital intensive C. labor; capital intensive O D. labor; labor intensive In the Heckscher-Ohlin, gains from international trade come from Select one: A. the increased wages. O B. the improvement in technology. C. the increasing on the consumption choices available to consumers. D. the...
Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country His relatively labor abundant, then once trade begins: c. wage/rent ratio rises in H wage/rent ratio falls in H wage/rent ratio remains constant in H. None of the above.
India is labour (L) abundant and the US is capital (K) abundant. The cut diamonds (C) Industry is L intensive while washing machines (W) manufacturing is K-intensive. If India and the US start trading with each other, then under the assumptions of the Heckscher-Ohlin Model: O Pc/Pw will rise in both countries. Pc/Pw will fall in India but rise in the US. e Pc/Pw will rise in India but fall in the US. Pc/Pw will fall in both countries.
61 Suppose that we are in a two-factor, two-country world where the factors of production are labor (L) and land (T), the returns to the factors are the wage rate (w) and the rental rate on land (t), and the countries are country A and country B. In this situation, country A is land-abundant relative to country B by the physical definition of relative factor abundance if price (or economic) definition if _, and country A is land-abundant relative to...
Production of TVs are relatively capital intensive, and tennis racquets are relatively labor intensive. Suppose Canada has $20 billion of capital and 30 million workers and Mexico has $15 billion of capital and 10 million workers. According to the Heckscher-Ohlin(-Samuelson) model: Canada will import TVs and import tennis racquets. Canada will export TVs and import tennis racquets. Canada will import TVs and export tennis racquets. Canada will export TVs and export tennis racquets.
59. The "magnification effect" refers to the fact that, when a country is opened to trade, a. the price of the export good rises. b. real income is magnified even though the PPF does not change. c. the price of the abundant factor rises faster than does the price of the export good. d. the price of the scarce factor rises. 60. In the 2x2x2 Heckscher-Ohlin analysis, if an relatively labor-abundant country is opened to trade, then, as the movement...
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