! Consider the following representation of the Ricardian Model. Two countries, India and Vietnam, produce twoproducts - tea and garments. Total labour supply in India is 48 and the total labour supply in Vietnam is 60. Thetable provides the unit-labour requirements () to produce tea and garments in each country.IndiaVietnamТеа12032Garments4816Consider a monopolistically competitiveindustry where firms differ in productivitylevels. When the industry opens tointernational trade, transportation andother transaction costs may determinewhich firms will remain exclusively in thelocal market and which firms will becomeexporters.a) True or False?b) Explain with the support of a graph.

Answered: Consider a monopolistically competitive…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter19: Labor And Entrepreneurship: The Human Inputs

Section: Chapter Questions

Problem 13DQ

See similar textbooks

Similar questions

. Ricardian Model. Consider two countries: A and B. Labour is the only factor of production for goods X and Y. Consider the following matrix of unit labour requirements. X Y Labor Endowments Country A aLx = 8 aLy = 4 240 Country B aLx* = 6 aLy* = 2 120 Which country has an absolute advantage in producing good X? Good Y? Which country has comparative advantage in producing good X? What is the autarky relative price of good X for country A? For country B? Draw the world relative supply curve RS for good X. Label all the axes (relative price of good X on the vertical axis and world output of x relative to y on the horizontal axis) and the relevant points. Suppose that the world relative demand RD for good X is given by: (Px/Py) = 7 – 9 * ( ( Qx +Q*x) / (Qy + Q*y) ). With free trade: (i) What will be the equilibrium world relative price of good X be equal to? (ii) Calculate the equilibrium wage rate w in A relative to that…
Assume that Trinbago is a small country that produces wine and motor vehicles, where motor vehicles are capital-intensive. Trinbago is also capital intensive, and the standard Heckscher -Ohlin (H-O) assumptions hold. The other country in the model is Vincyland. Questions: Give a short background on the Heckscher-Ohlin Trade model and then answer the following questions. (d) Show the necessary graphs to fully explain all requested effects. Ensure to label graphs and give brief explanations. (e) Given that Vincyland is a small country, examine the partial equilibrium welfare effects associated with imposing a tariff on their import good given that the prediction of the imported good yields a positive externality.Should a subsidy have given a more desirable solution? Please explain
As a result of NAFTA what is Hecksher-Ohlin model concerning on labor intensive and capital intensive ?
Consider an offshoring model such as the one illustrated in Figure 7‑1 in the text. In this model, the relative wage of low‑skilled labor to high‑skilled labor is lower in Foreign than in Home. The costs of capital and trade are uniform across production activities. a. Suppose that Home uniformly increases the tariff it applies to imports of all goods and services from Foreign. How does this affect the slicing of the value chain? The increased tariff___. b. On the labor supply and demand diagrams for Home and Foreign, show the effects of the change described in part a. Shift the curves affected and identify the new equilibriums with points B and B'. What happens to the relative wage in each country? c. Suppose instead that the Home country requires that low‑skilled labor in Foreign be paid a minimum wage that is higher than its current wage. This wage is still less than what low‑skilled labor earns at Home. How does this affect the slicing of the value chain? d. Continuing from…
In Michael Porter's Diaond Model of National Advantage, when a country has 6 months with night and 6 months with sunlight, the effect of these conditions can be studied under what attribute? * a.Firm Strategy, Structure, and Rivalryb.Demand Conditionsc.Related and Supporting Industriesd. Factor Conditions
The logic of service outsourcing - The Ricardian model It is sometimes argued in editorials or TV commentaries that the modern wave of outsourcing, especially outsourcing of services to Pakistan, defies the logic of the Ricardian model. Let’s examine if this is actually the case. The following table presents information on labor productivity in computer component production and call center services in Canada and Pakistan. Assume that Canada has an absolute advantage in both. To complete the following table, choose the number of calls that would be most plausible and consistent with the reality of outsourcing services to Pakistan, and indicate the good in which each country has a comparative advantage. Production per Employee Production per Employee Computer Components Call Center Services Country (Units per hour) (Phone calls per hour) Comparative Advantage Canada 18 9 _____ (Call Center Services / Computer Components Production)…
____ a. individualistic capitalism____ b. political action committees____ c. oligopoly____ d. government____ e. nation-state____ f. democracy ____ g. monopoly____ h. downsizing____ i. communitarian capitalism____ j. authoritarianism____ k. terrorism____ l. traditional authority ____ m. power elite____ n. rational-legal authority____ o. bourgeoisie____ p. elitism____ q. interest group____ r. corporation Match the following concepts with the definitions listed below them. 1. the type of political system controlled by nonelectedrulers who generally permit some degree of individualfreedom2. members of a society who own productive property3. the type of political system in which elected officials areheld responsible for fulfilling the goals of the majority ofthe electorate4. the theory of power distribution that sees society in thecontrol of a few individuals and organizations5. a group organized to achieve some specific, shared goalsby influencing political decision making6. a situation in…
Romer’s (1986, 1990) approach to endogenous growth laid out a model which appeared to show that there were increasing returns to scale from technology and the accrual of savings to this technology. At a firm level, this seemed to imply that monopolies within a country would emerge. However, in reality, this is not the case. What is the reason that competition still survives in endogenous growth models (and, by extension, in reality)?
Assume a Ricardian, constant-cost world. There are two countries, the United States andCanada. Each country can produce cameras and milk. The table below shows production perman-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500workers.a) Graph the world supply curve for cameras.b) Show a possible world demand curve and price
How can analysis of national competitiveness explain the competitive advantage an SME firm is capable of achieving in international markets?
Assume a Ricardian, constant-cost world. There are two countries, the United States andCanada. Each country can produce cameras and milk. The table below shows production perman-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500workers.a) Graph the world supply curve for cameras.b) Show a possible world demand curve and price (assuming that both countries completelyspecialize).
Using the one factor Ricardian model concept and the unit labor requirements information in the table below, determine a) What is the opportunity cost of domestic and foreign Cheese production?b) What is the opportunity cost of domestic and foreign wine production?c) In which commodity production, domestic has a comparative advantage.Explain.d) In what commodity production, foreign has a comparative advantage.Explain.e) Which country has an absolute advantage. Explainf) If PC is the price of Cheese and PW is the price of Wine, and PC = PW, thenWhat commodities will domestic specialize in?g) If PC is the price of Cheese and PW is the price of Wine, and PC = PW, thenwhat commodities will foreign specialize in?h) Using the comparative advantage information above, determine the commodity thatexported and imported by domestic and foreign respectively?i) If PC = PW or PC/PW = 1, what is the gain from trade obtaineddomestic and foreign if each country specializes inwhich production has a…

SEE MORE QUESTIONS

Recommended textbooks for you

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS