In 2020, Spain had a population of 46 million and its capital stock was US$90,000 billion. The corresponding figures for Australia were 26 million and US$75,000 billion. Suppose computer-chips manufacturing is capital-intensive relative to food processing. As such, in a two-factor, two-commodity and two-country world, Australia would have exported computer-chips to Spain and imported processed foods from Spain. Do you agree? Justify your answer using an appropriate trade model
In 2020, Spain had a population of 46 million and its capital stock was US$90,000 billion. The corresponding figures for Australia were 26 million and US$75,000 billion. Suppose computer-chips manufacturing is capital-intensive relative to food processing. As such, in a two-factor, two-commodity and two-country world, Australia would have exported computer-chips to Spain and imported processed foods from Spain. Do you agree? Justify your answer using an appropriate trade model
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter15: International Trade And Finance
Section: Chapter Questions
Problem 6SQ
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In 2020, Spain had a population of 46 million and its capital stock was US$90,000 billion. The corresponding figures for Australia were 26 million and US$75,000 billion. Suppose computer-chips manufacturing is capital-intensive relative to food processing. As such, in a two-factor, two-commodity and two-country world, Australia would have exported computer-chips to Spain and imported processed foods from Spain. Do you agree? Justify your answer using an appropriate trade model
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