1. Assumption: Commodity F is final good, Commodity A and B are intermediate goods. It needs one unit A and one unit B to produce one unit F. Commodity A and B can be imported or locally produced. Under the condition of free trade, the price of F is US$1000, the price of A is US$500, the price of B is US$200. % (3) If the country impose 10% tax on final good F, 20% tax on commodity A, and 20% tax on commodity B. Calculate the effective protection rate of Commodity F.
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- please help mw with this question. Thank you Question 2 Consider a country that produces two goods wheat (W) and cotton (C) with two factors of production: land (T) and labor (L). The technology for wheat and cotton are as follows. Each unit of wheat requires 10 units of labor and 1 unit of land. Each unit of cotton requires 30 units of labor and 1 unit of land. Denote the wage by w and the rent of land by r. a. Suppose a country has 500 units of labor and 20 units of land. Determine the allocation of labor and land between the two goods algebraically and then show it diagrammatically. How much of wheat and cotton are produced in the economy? b. Now suppose that the labor supply increases to 540 units. Determine the allocation of labor and land between the two goods algebraically and then show them diagrammatically. Verify the Rybczynski’s theorem. c. Now Suppose Malaysia has 500 units of labor and 20 units of land, while Indonesia has 80 units of land and 8000 units of labor. Which…Suppose countries A and B produce and consume (assuming convex preferences) apples and bananas using only labour. Unit labour cost for apples in country A are 2 and 1 in country B. Unit labour cost for bananas are 5 in country A and 4 in country B. The labour force is the same in both countries, and given by 100 in each country. Which three of the following statements are true? Each country has an absolute advantage. Allowing for international trade, the production of 100 apples and 20 bananas can occur in a global market equilibrium, but not in a market equilibria under autarky. Country A will produce apples, with or without international trade. Under autarky, the relative price for apples (price for apples/price for bananas) equals 0.4 in country A and 0.25 in country B. Country B has an absolute advantage in producing bananas. Allowing for international trade, the production of 60 apples and 40 bananas is feasible, but…1. Hoverboards and the Factory Market Area: Suppose there is a single shoe factory in the region. The factory competes with homemade shoes and will sell shoes to any household for which the net price of factory shoes is less than the cost of homemade shoes. The cost of a homemade shoe is the opportunity cost of the time required to make the shoe at home, that is, the one gallon of milk that could be produced instead. Suppose the higher cost of living and commuting requires compensation of 0.80 gallons of milk per hour. Each worker produces 10 shoes per hour, so the average labor and capital cost are 0.18 gallons of milk and 0.12 gallons of milk respectively. The factory price of shoe (equal to the average production cost, sum of the average labor cost and the average capital cost) is 0.30 gallons of milk. A round-trip mile involves one mile of travel to a location and one mile back, for a total distance of two miles. Linear travel cost 20 miles /hour. Therefore, the typical person…
- Suppose countries A and B produce and consume (assuming convex preferences) apples and bananas using only labour. Unit labour cost for apples in country A are 1 and 2 in country B. Unit labour cost for bananas are 2 in country A and 5 in country B. The labour force is the same in both countries, and given by 100 in each country. Which three of the following statements are true? A Country B has a comparative advantage in producing bananas. B Allowing for international trade, the production of 50 apples and 50 bananas can occur in a global market equilibrium feasible, but not in market equilibria under autarky. C Each country has an absolute advantage. D Allowing for international trade, the production of 50 apples and 50 bananas is feasible, but not under autarky. E Under autarky, the relative price for apples (price for apples/price for banans) equals 0.5 in country A and 0.4 in country B. F Country A will produce bananas, with or…Ginny and Lucia are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Ginny takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Lucia takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. 1. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is (1/2 gallon, 2 gallons,3/5 gallon or 1 2/3 gallons)of root beer, and the lowest price that makes both roommates better off is (1/2 gallon, 2 gallon, 3/5 gallons, or 1 2/3 gallons)of root beer per pizza.Suppose the economy initially produces 15,000 gallons of drinking water and 450,000 tons of steel, which is represented by point A. The opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving production to point B) is (72,000, 135,000, 90,000, 54,000, 108,000) tons of steelSuppose, instead, that the economy currently produces 378,000 tons of steel and 20,000 gallons of drinking water, which is represented by point B. Now the opportunity cost of producing an additional 5,000 gallons of drinking water (that is, moving to point C) is (72,000, 135,000, 90,000, 54,000, 108,000) ons of steel.Comparing your answers in the two previous paragraphs, you can see that the opportunity cost of 5,000 additional gallons of drinking water at point B is (Less, Equal, Or Greater Than) the opportunity cost of 5,000 additional gallons of drinking water at point A. This reflects the (Notion that Countries can gain from trade, Law of Increasing Opportunity Costs, Fact…
- Indicate whether each of the following statements is true or false. Statement True False 1. There can be no gains from trade between two countries if one of them has an absolute advantage in the production of all goods. 2. Comparative advantage determines the gains from specialization and trade. 3. If a certain trade is good for one country, it can't be good for the other country. 4. Two individuals can benefit from specialization and trade if they agree upon a price that lies between their opportunity costs of producing the good. 5. When a country opens to trade, people working in industries producing goods that the country exports are harmed by the trade.Copy and complete the table below. Q MUx MUy AUx AUy TUx TUy MUx/Px=5 MUy/Py=4 MUy/Py=8 1 60 30 30 30 2 24 55 54 10 3 35 22 145 66 3 1.5 4 6 18 160 3 5 5 3 33 15 75 6 0 12 165 -0.75 -0.375 Given that Q is the units of quantity of commodity X and Y consumed, MUX, AUX, TUX and PX are marginal utility, average utility, total utility and price of commodity X The utilities of commodity Y are similarly defined. Use the information in the above table to answer the questions that follows: Which of the commodities would he pay higher price when 4 units are consumed? Suppose the price of X is 5 and that of Y is 4. How many of the quantity of X and Y should be consumed in order for the consumer to be in equilibrium. If price of Y increase to 8 whiles that of X remains the same, determine the units of X and Y that the consumer need to consume for him to be in equilibrium. Use your results to draw a demand curve for…Suppose the market price for solar panels in the U.S. will be $500 per panel in the absence of any trade in solar panels. The price of solar panels in the world market is $295 per panel. What will be the price of solar panels in the U.S. if the U.S. has free trade in solar panels? Diagrammatically show the gains from trade in solar panels. (Change in welfare as a result of free trade in solar panels compared to the situation of no trade. Show how the different components of welfare such as consumer surplus and producer surplus change.) Now suppose the Trump administration imposes a quota. That is, it says that it will allow the import of only 10 million panels a year (With free trade the imports would have been more than 10 million). Will the price of solar panels rise or fall in the US? Who will gain from the quota? Who will lose? Diagrammatically show the welfare impact of the quota compared to the free trade (Again show the change in welfare in terms of consumer surplus, producer…
- Suppose that we are in a small, local economy that produces three goods. They are: (i) Food, (ii)Gas, and (iii) Housing. The prices for reach of these goods from 2019-2022 are:Good 2019 Price 2019 Quantity 2020 Price 2020 QuantityFood 10 12 14 15Gas 2 2 1.50 1.50Housing 2,000 2,500 2,200 1,800Good 2021 Price 2021 Quantity 2022 Price 2022 QuantityFood 12 15 15 16Gas 3 2 4 2.50Housing 2,300 2,200 2,400 2,3001. Calculate the Nominal GDP for this economy for 2019, 2020, 2021, and 2022. 2. Calculate Real GDP for this economy for 2019, 2020, 2021, and 2022, using the year 2019as the base year. 3. Calculate Real GDP for this economy for 2019, 2020, 2021, and 2022, using the year 2020as the base year. 4. Calculate the Real GDP Deflators for 2021 and 2022 using the Nominal GDPs youcalculated in Q1 and the Real GDPs you calculated in Q3.5. What is the annual inflation rate for 2022 according to the Real GDP Deflators youcalculated in Q4? Now suppose that the Local Government is interested in…Please see attachment and show your work . What are the steps and answer with explanation? Please examine the market for AC units below. In this market, the Home nation has imposed a quota limiting the number of AC units that foreign nations are allowed to export into the Home economy. If the home nation increased the level of the quota (theerby allowing more AC units to be imported into the Home economy), then we would expect ___________ to increase in the home economy. 1. consumer surplus 2. producer surplus 3. quota revenue 4. deadweight lossAn economy produces two goods ,X and Y .lt uses two means of production, labour and capital. A unit of labour can produce either 1unit of X or 4units of Y (or linear combination of the two).A unit of capital can produce either 4units of X or 1unit of Y (or linear combination of the two)there are 100units of each means of production. (i) Draw the production possibility frontier of the economy when the two goods can only be produced by a mixture of both factors. (ii)What will be the opportunity cost of X if the economy produces 50units of X ? (iii) Given that the production technology is linear ,will the opportunity cost of X remain unchanged when we produce 90units of X ? (iv)Briefly explain the difference between the PPC with a constant opportunity cost and the PPC with an increasing opportunity cost as more output of one good is produced. Use a well labeled diagram to explain your answer?