Consider a Ricardian model with two countries, the United States and Ecuador, producing two goods, bananas and machines. Assume the United States has 3,200 workers and Ecuador has 400 workers. Unit labor requirements for United States in bananas and machines are: 12 and 6 Unit labor requirements for Ecuador in bananas and machines are: 10 and 9 If each country applies half of its workforce to producing machines, how many machines together would both countr

Consider a Ricardian model with two countries, the United States and Ecuador, producing two goods, bananas and machines. Assume the United States has 3,200 workers and Ecuador has 400 workers. Unit labor requirements for United States in bananas and machines are: 12 and 6 Unit labor requirements for Ecuador in bananas and machines are: 10 and 9 If each country applies half of its workforce to producing machines, how many machines together would both countr

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 6SCQ: Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram...

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If countries specialize according to their absolute advantage then the Ricardian model statesthata. the. trade is beneficial for all trade partners.b. trade is a stupid idea anyway.c.it is ambiguous whether trade is beneficial for all trade partners.d. trade is only beneficial for those who have absolute advantage as well
Using the one factor Ricardian model concept and the unit labor requirements information in the table below, determine 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 comparative advantage? Explain.j) If if PC = PW = $9, what is the wage relative to trade.Which country's workforce benefits from the trade?
Suppose that each worker in France can produce either 20 units of food per hour or 80 units of machinery per hour. At the same time, workers in Belgium can produce either 80 units of food per hour or 320 units of machinery per hour. Will the two countries trade according to the Ricardian model? If yes, which country will specialize in the production of machinery and which country will specialize in the production of food? In no, why not?
What would happen in Ricardian model and the Heckscher-Ohlin model, a) If one country tried to export more to the other country? b) If one country restricted the amount of imports from the other country? c) What does this imply for trade policy? Please answer correct explain plz asap plz Don't answer by pen paper plz
Problem 1. This problem is based on the Ricardian Model. Assume that 2 countries, Gryffindor and Slytherin, use troll labor to produce 2 goods, magic wands and chocolate frogs. (a) In Slytherin, 1 troll can produce 6 magic wands or 10 chocolate frogs, while in Gryffindor the production of 1 magic wand requires 2 trolls and the production of 1 chocolate frog requires 1 troll. Assume that there are 10 trolls in Slytherin and 20 trolls in Gryffindor. Draw a PPF for each country. (b) Which country has a comparative advantage in magic wands and why? (c) What is the possible maximum relative price of a magic wand in the trade equilibrium? What is its possible minimum price?
Consider a Ricardian framework with two countries, A and B, and two products, G1 and G2. The following table shows the marginal product of labour in G1 and G2 in both countries. G1 G2 Country A 3 7 Country B 7 5 Which one of the following independent scenarios is not possible at the trade equilibrium? A.Compared to autarky, country A workers receive the same real wage in G2. B.Relative price of G1 is 8/3. C.Compared to autarky, country B workers receive higher real wage in G1. D.Relative price of G1 is 5/7.
Read the following definitions of globalization by various scholars. Explain its meaning 1. "Globalization can be defined as a historical stage of accelerated expansion of market capitalism, like the one experiencedn the 19th century with the industrial evolution. It is a fundamental transformation in societies because of the recent technological revolution which has led to a recombining of the economic and social forces on aanew territorial dimension. 2. "Globalization means closer integration of national economies through trade and financial flows as well as cross-border migration of people. As national economies "open up" and lower their external barriers, they become more exposed - and more vulnerable - to global forces and influences." 3. "Globalization is the word used to describe the growing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and…
Explain what gains from trade are. Use the Ricardian model to explain the how an economy obtains gains from trade.
Consider a Ricardian trade model where both countries have expenditure share q = 0.2 on manufactures, Country 1 has Am = 1 and As = 4 and L = 100 while Country 2 has Am* = As* = 0.5 and L* = 200. With free trade, which of the following is true? Group of answer choices - The relative wage is w/w* = 8 - Country 1 produces 400 services and exports 80 services - Country 2 produces 100 manufactures and exports 80 manufactures - All of the other options
Consider the Ricardian model with two countries, Home and Foreign, and two goods, X and Y. If Foreign workers have a higher real wage than Home workers and Home country has a comparative advantage in good X, we can conclude that: (a) Foreign country has absolute disadvantage in good Y. (b) Home country has absolute disadvantage in good X. (c) Foreign country cannot benefit from trade with Home country. (d) If trade is allowed, in Foreign country, those labours that are employed in the production of good X will lose from trade whereas the ones employed in the production of good Y will gain from trade. Explain your answer clearly. Limit your explanation to 200 words.
(a) Consider an economy that is initially in a steady state equilibrium. Assume that in this equilibrium it has a saving rate of 50 per cent and a depreciation rate of 2 per cent. Further assume that the population growth rate is 3% and that the level of output produced can be represented by the following production function: = where A = 1 and = 0.5. Use the Solow-Swan model to determine the level of capital per worker and output per worker in this economy. (1 mark) (b) Now suppose the government introduces a set of policies to improve the institutional set up as well as better production technique which increases total factor productivity by double. What is the new steady state level of capital per worker and output per worker? (1 mark) (c) Use a Solow-Swan diagram to show the qualitative effects of this new government policy upon steady state output per worker and capital per worker. Briefly describe the intuition behind this result. (1 mark) (d) Now suppose, population growth rate…
Let's see how many jobs have to be destroyed for one net job to be created. As noted in the text, millions of jobs are created and destroyed every month. Suppose that 5 million jobs are destroyed every month and 5.25 million jobs are created. What is the net job creation? Net job creation: million How many total jobs are destroyed for every net job created? Total jobs destroyed for every net job created: