Kindly correctly 2. Opening the modelIn Session 2 you explored a simple Closed Leontief Exchange Model with five in-terdependent industries. In the closed exchange model no goods or services enteror leave a national economy. However, most nations import and export goods. Forthis problem you will develop an open exchange model for the newly formed nation,NationLand, then generalize the model to an economy with n sectors.(a) Suppose NationLand has 5 sectors: agriculture (A), energy (N), real estate(R), education (E), and entertainment (T). The following table represents thenumber of units of goods from other sectors used to produce one unit with agiven sector. The table also lists the demand for each good from NationLand'strading partners.Internal and External Unit Demand LevelsInternal Consumption RatesA N R E0.1 0.05 0.025 0.15T0.05Agriculture (A)Energy (N)Real Estate (R)0.01 0.02 0.0 1 0.01 0.0250.4 0.3 0.1 0.1 0.25Education (E) 0.1 0.05 0.125 0.2 0.15Entertainment (T) 0.01 0.05 0.15 0.25 0.05Outside Demand (total)401001525Let A, N, R, E, and IT denote the number of units produced by the agri-culture (A), energy (N), real estate (R), education (E), and entertainment (T)sectors respectively. Write a system of equations that defines the number ofunits each sector should produce to satisfy both internal and external demand(total units).(b) Rewrite your system of equations in the form M = d where M is a matrix ofcoefficients. What do and d represent in this model?(c) Does the system have a solution? In other words, is there a set of productionlevels that would satisfy both internal and external demand? Is this solutionunique?

An input-output model is given by Leontief. This model refers that an economy is in equilibrium…

In Session 2 you explored a simple Closed Leontief Exchange Model with five in- terdependent industries. In the closed exchange model no goods or services enter or leave a national economy. However, most nations import and export goods. For this problem you will develop an open exchange model for the newly formed nation, NationLand, then generalize the model to an economy with n sectors. (a) Suppose NationLand has 5 sectors: agriculture (A), energy (N), real estate (R), education (E), and entertainment (T). The following table represents the number of units of goods from other sectors used to produce one unit with a given sector. The table also lists the demand for each good from NationLand's trading partners.

In Session 2 you explored a simple Closed Leontief Exchange Model with five in- terdependent industries. In the closed exchange model no goods or services enter or leave a national economy. However, most nations import and export goods. For this problem you will develop an open exchange model for the newly formed nation, NationLand, then generalize the model to an economy with n sectors. (a) Suppose NationLand has 5 sectors: agriculture (A), energy (N), real estate (R), education (E), and entertainment (T). The following table represents the number of units of goods from other sectors used to produce one unit with a given sector. The table also lists the demand for each good from NationLand's trading partners.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter19: International Trade

Section: Chapter Questions

Problem 1.2P

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What is splitting up the value chain?
4. Assume a two-country two-good two-input model. Let the countries in the model be Vietnam andMyanmar and the goods be shirts and natural gas. The two factors of production are labor and land.Further, Vietnam is labor-abundant and shirts production is labor-intensive. Suppose, in the absenceof trade, Vietnam operates at a point on its production-possibility curve where it produces andconsumes 20 units of shirts and 25 units of natural gas. Once it engages in free trade, the internationalprice of one unit of natural gas is .8 units of a shirt. In response to the opening of trade, Vietnammoves along its production-possibility curve to a new point where it produces 100 units of shirts and10 units of natural gas. Assume that with free trade, Vietnam chooses to consume 52 units of shirtsand chooses to trade all of its remaining surplus of shirts.a. Demonstrate the gains to trade for Vietnam.
9. Answer ALL parts of this question. Consider the standard trade model with two goods and two factors, labour and capital. (a) Suppose that a country experiences an increase in its labour force. Assume thatgood X is labour intensive and good Y is capital intensive. How would theproduction possibility frontier change as a result? Illustrate this with a simplediagram. (b) What does it mean for the “terms of trade” to improve and why might this matter interms of welfare? (c) Consider two countries: Home and Foreign. Each country produces two goods,cloth (C) and food (F). Assume Home is an exporter of cloth. Now suppose Homeimposes a 20 percent tariff on the value of food imports. What will be the effect ofthe food tariff on the relative price of cloth and terms of trade? Illustrate youranswer with a relevant diagram. You may assume that Home is large enough toaffect the world market.
19. If production of specific goods exhibit the opportunity for economies of scale (Oil for example), then: A. the countries producing these goods gain from trade while other countries are worse off. B. the countries producing these goods lose from trade while other countries are better off. C. all countries gain from trade but those not producing the goods with economies of scale gain more. D. all countries gain from trade but those producing the goods with economies of scale gain more. Please give correct step by step answer with proper explanation of each option given within 40 50 minutes . Thank you
1.How do international economic relations differ from interregional economic relations?(b) In what way are they similar?2.How can we deduce that nations benefit from voluntarily engaging in international trade?3. Can you think of some ways by which a nationcan gain at the expense of other nations from traderestrictions? 4.Answer the following questions with reference toProblem 5.(a) What is the dollar price of wheat and cloth inthe United Kingdom if the exchange rate betweenthe pound and the dollar is £1 = $2? Would theUnited States be able to export wheat to the UnitedKingdom at this exchange rate? Would the UnitedKingdom be able to export cloth to the UnitedStates at this exchange rate?(b) What if the exchange rate between the dollarand the pound were £1 = $4?(c) What if the exchange rate were £1 = $1?(d) What is the range of exchange rates thatwill allow the United States to export wheat tothe United Kingdom and the United Kingdom toexport cloth to the United States. 5.(a)…
Draw the production possibility curve for each country using the data provided in the table. b. Which country has an absolute advantage in what product? Which country has a comparative advantage in what product? Show your work! c. Without trade, what is the price of food in terms of computers for both countries? Showyour work! d. What is the range of prices (i.e., the CPC) at which trade can occur? Also, show (a) the possible CPC for each country and (b) the possible production and consumption possibility lines for both countries after trade. Show your work!
Which statements are true or false? 1. S1: The equilibrium nations want to achieve ideally is the stableequilibrium. S2: The general idea of an equilibrium is one in which allparticipants are doing what is best for them, given what they expect othersto do, which in turn matches what others are actually doing.
3. In the Ricardian model of trade, which of the following statements is false?A. The consumption possibilities frontier is the same as the production possibilities frontierin autarkyB. Two countries will trade so long as they each have comparative advantageC. The introduction of trade leaves the production possibilities frontier unchangedD. Trade may not lead to complete specialization
1. International economics refers to? 2. International economics is about how nations interact through? 3. What is the problem that will raise due to the economic interaction between several countries? 4. What are the two types of international economics? 5. Who sells what to whom has been a major interest in? 6. When imports are more than exports in value, it may be offset by net inflows of financial assets, this refer to which type of trade balance? 7. When imports are less than exports in value, it would not offset by net inflows of financial assets, this refer to which type of trade balance? 8.What is the risk that a domestic capital market would not face compared to international capital market?
Z and S.A are trading partners. Both produce metal ores (including lithium) and delivery trucks. Now suppose that if Zimbabwe uses all of its resources, it can produce 50,000 tons of metal ores or 100,000 delivery trucks (trading off at a constant rate). Suppose that if South Africa uses all of its resources, it can produce 20,000 tons of metal ores or 80,000 delivery trucks (trading off at a constant rate). What is the direction of the trade (who exports what to whom)? Be sure to give the opportunity costs of production of both goods for both countries.
5) Suppose that the United States has an absolute advantage over Mexico in producing both agriculturaland manufactured goods. In the U. S., the opportunity cost of 1 unit of agricultural output is 2 units ofmanufactured goods. In Mexico, the opportunity cost of 1 unit of agricultural output is 1.5 units ofmanufactured goods. Total production in the U. S. and Mexico will be maximized ifa. the U. S. specializes in both types of outputb. Mexico specializes in both types of outputc. the U. S. specializes in agricultural goods and Mexico specializes in manufacturedgoodsd. the U. S. specializes in manufactured goods and Mexico specializes in agriculturalgoodse. each country achieves self-sufficiency
2. American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Which country has a comparative advantage in producing cars? In producing grain? Without trade, half of each country’s workers produce cars and half produce grain. What quantities of cars and grain does each country produce? Starting from a position without trade, give an example in which trade makes each country better off.