Cars and wine require capital and labor to be produced. Suppose that car production is capital intensive. In which country will wages rise after opening up to international trade? Country A Country B Not enough information
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Consider two economies with two goods, as in the picture below:
Wine
O
Country A
Cars
Country A
Country B
Not enough information
Wine
Cars and wine require capital and labor to be produced. Suppose that car production is capital intensive. In which country will wages rise after opening up to international
trade?
Country B](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4bda9b14-43b2-4e4d-a7f7-40428dd1132c%2F81d2932b-a97a-4d02-a7a9-c96dd1f09738%2F3evfsan_processed.jpeg&w=3840&q=75)
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- Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.Table 33.15 shows how the average costs of production for semiconductors (the chips In computer memories) change as the quantity of semiconductors built at that factory increases. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.How does comparative advantage lead to gains from trade?
- Home has 12,000 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 100, while in banana production is 75. There is now also another country, Foreign, with a labor force of 18,000. Foreign’s unit labor requirement in apple production is 120, while in banana production is 150. Graph Foreign’s PPF. Construct the world relative supply curve of banana. What will happen if Pa/Pb < 4/5? Graph the relative demand curve along with the relative supply curve of banana. Assume: Demand for apples/ demand for bananas =half of price of bananas/ price of apples What is the equilibrium relative price of banana?Consider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 6. In India, how many units of corn is it willing to give-up to produce a unit of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough data 7. The US, to achieve comparative advantage in producing a unit of corn, need to give-up how many unit(s) of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough dataAssume that during the years 2022 to 2025 Woodland Republic could produce only two commodities: tractors and rice. Also, assume that Woodland Republic canprocuce at any of the positions represented by the production possibility schedule below. A B C D E F G H Tractors 0 2 4 7 9 11 13 14 Rice (in tons) 100 95 85 70 60 50 30 0 Suppose in 2022 the economy is producing at point D. What is the opportunity cost of producing 6 more tractors in 2023
- Home has 12,000 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 100, while in banana production is 75. There is now also another country, Foreign, with a labor force of 18,000. Foreign’s unit labor requirement in apple production is 120, while in banana production is 150. Graph Foreign’s PPF. Construct the world relative supply curve of banana. What will happen if ? Graph the relative demand curve along with the relative supply curve of banana. Assume: Demand for apples/ demand for bananas =half of price of bananas/ price of apples What is the equilibrium relative price of banana?Suppose a country which produces only agricultural goods and electronic goods. Both goods use capital and labour as production inputs, however, the agricultural goods are assumed to be more labour-intensive. On three separate graphs, draw the “original” production possibility boundary (electronic goods on the horizontal axis, agricultural goods on the vertical axis) and illustrate each of the following situations: a. the country observes large increases in immigration; b. there is a technological improvement in the production of military goods only;c. a neighbouring country threatens to invade and the country responds by devoting more resources to military goods.Question 1Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the following events: Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing. a) Increasing skilled migration into the countryb) Imposing taxes on manufacturing (hint: define a two-sector producing economy, manufacturing and services).c) Decreasing the expenditure on research and developmentd) Implementation of easier rules for foreign investmente) The effects of a pandemic Question 2 Identify what sort of effects the following listed events have. You are required to define the market under study (for example: the labour market, oil market, etc). Explain whether the event acts on the demand or supply side, and whether the event leads to a quantity or…
- Question 1Assume that during the years 2022 to 2025 Woodland Republic could produce only two commodities: tractors and rice. Also, assume that Woodland Republic can procuce at any of the positions represented by the production possibility schedule below. ABCDEFGH Tractors 02479111314 Rice (in tons)1009585706050300 Suppose in 2022 the economy is producing at point D. What is the opportunity cost of producing 6 more tractors in 2023What is meant by production and consumption being pro-trade, antitrade, or neutral? What are the terms of trade effect and wealth effect of growth? explain in detailUsing a production possibilities frontier (PPF) diagram, determine how does the PPF changein response to the following events:Make sure to explicitly indicate what sectors you are representing, and what sort ofassumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latterfollows from your assumptions on the factor intensity of the sector you are representing.a) Increasing skilled migration into the countryb) Imposing taxes on manufacturing (hint: define a two-sector producing economy,manufacturing and services).c) Decreasing the expenditure on research and developmentd) Implementation of easier rules for foreign investmente) The effects of a pandemic
