3. If K denotes Korea, M denotes Malaysia, L denotes lumber, and A denotes automobiles, (%)*me %] to describe the pattern of comparative advantage and L P use (%)" 4. In a new pair of PPF diagrams, illustrate the trading equilibrium with For both countries, lustrate the production point (B), the consumption point (C), the quantity of imports, and the quantity of exports

The following hypothetical production possibilities tables for China and Canada. Assume that, before specialization and trade, the optimal product mix for China is alternative D and for Canada is alternative S.

Finally, Canada and Australia are both English-speaking countries with not-too dissimilar population sizes. However, Canada’s trade is twice as large as that of Australia’s. to what extent, does comparative advantage help explain this?

Consider a region with two export products (gloves and socks) and two local goods (tattoos and manicures). The production of each export good is subject to localization economies, so each city specializes in one export good. According to Mr. Wizard, “If my two assumptions (one for export products and one for local goods) are correct, all the cities in the region will be the same size.” Assume that Mr. Wizard’s logic is correct. List his assumptions and explain why together they imply the region’s cities will be the same size.

As you may have heard, Russia decided to invade its neighbor, which has led to international condemnation (albeit not on all fronts). The EU, a former major importer of gas from Russai, went ahead with sanctions. Imagine, if you will, that the respective heads of state get together and try to negotiate a trade agreement to end sanctions. They each have three possible choices: (a) Maintain tariffs against the other nation (T); (b) Seek mediation from the WTO, which would implement an international trade agreement at a small cost (M); (c) Unilaterally remove tariffs (F). The payoff matrix is as given below. Is there a dominant strategy for either player? Find all the (pure strategy) Nash equilibria in the game. How would this change if, instead, the mediation is costless and yields a payoff of 50 to each nation (assuming mutually successful mediation) and a payoff of 0 (if the other nation chooses otherwise)? **

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Cashews (pounds) 150 Pakistan 240 Cotton (bolts) Cashews (pounds) 120 Indonesia 320 Cotton (bolts) The figure above shows the production possibilities frontiers for Pakistan and Indonesia. Each country produces two goods, cotton and cashews. If the two countries have the same amount of resources and the same technological knowledge, which country has an absolute advantage in the production of cotton?

1-Analyze the following (2x2) matrices. Identify the countries having certain advantages. Moreover, specify the benefits of trade for both countries. A (2x2) matrix involves (2 countries exchanging 2 commodities or products) Matrix A Wheat (bushels/labor Cloth (yards/labor hour) hour) United States U.K. 3. (Numerical values reflect output per unit of input) a. Will trade occur??? Identify the country having the absolute advantage in wheat and the one having the absolute advantage in cloth. b. Identify the production possibility frontiers for both countries. c. Show me the gains of trade if we assume that the U.S. exchanges 6 units of wheat for 6 units of cloth.

The table below for the United States and Mexico shows maximum feasible production rates per acre of wheat if no rice is produced and maximum feasible production rates per acre of rice if no wheat are produced. Assume that the opportunity costs of producing these goods are constant in both countries. Output per Acre with Trade Wheat 80 tons United States Mexico 55 tons For the United States, the opportunity cost of 1 ton of wheat is tons of rice. (Enter your response rounded to two decimal places.) has a comparative advantage in wheat, and has a comparative advantage in rice. Now consider the following table that shows the production and consumption of wheat and rice if there is no trade. Output per Acre with No Trade Wheat 40.0 tons 27.5 tons United States Mexico Total output of wheat if the two countries do not trade tons. (Enter your response rounded to one decimal place.) Total output of rice if the two countries do not trade tons. (Enter your response rounded to one decimal place)…

It has been shown that the US has a comparative advantage in capital-intensive goods while China has a comparative advantage in labour-intensive goods. Suppose as a result of trade the US's economy is going to grow by 30% and that of China by 40%. Based on this information, which of the following statements is correct? a) The US has the stronger bargaining power in the determination of the relative price after trade. b) In the US, the employers are better off while the workers are worse off as a result of trade. c) Specialization means that China will produce all the capital-intensive goods. d) China has the stronger bargaining power in the determination of the relative price after trade.