* 00B# 3QUESTION 33Ricardo's theory of trade is based on(A: productivity of labor; B: dpportunity cost; C: capital labor ratio).QUESTION 34The MRS (marginal rate of substitution) is the slope ofcurve; C: consumption curve).(A: production possibility curve; B: indifferenceQUESTION 352 pIncreasing opportunity costs result in a production possibilities frontier that ishorizontal) to the origin.(A: convex; B: concave; C: linear; D:Save All AnswersMAR12étvMacBook AirSCF108F2F4F5F7F 8F10i2$2(4.5.|]A.XC.optioncommandcommandoption

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Answered: QUESTION 33 Ricardo's theory of trade…

QUESTION 33 Ricardo's theory of trade is based on (A: productivity of labor; B: doportunity cost; C: capital labor ratio).

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 6SCQ: Table 33.15 shows how the average costs of production for semiconductors (the chips In computer...

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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.
Q3. Suppose that country A produces two goods (a labor-intensive good X, furniture, and a capital-intensive good Y, autos) and is considering forming a free trade agreement with one of its trading partners. The future free trade agreement is opposed by labor unions in country A. Could you infer which type of country (namely, capital- or labor-abundant) country A and its trading partner are, respectively? What would happen to the two countries’ w/r ratios (the ratios of wage rate relative to capital rental rate) after the formation of the free trade agreement? Your answer:
Consider two competitive economies that have the same quantities of labor and capital (K=L), and the same technology. The economies of the countries are described by the following Cobb–Douglas production functions: North Economy: Y = AK^0.7 L^0.3 South Economy: Y = AK^0.3 L^0.7 If half of workers (L) in North immigrated to South, explain how would total output, marginal produc- tivity of labor, and labor’s share of income in the two economies change?
Consider two competitive economies that have the same quantities of labor (L = 400) and capital (K = 400), and the same technology (A = 100). The economies of the countries are described by the following Cobb–Douglas production functions: North Economy: Y = A L.3K.7 South Economy: Y = A L.7K.3 In which economy is labor's share of income larger? Explain
Consider two competitive economies that have the same quantities of labor (L = 400) and capital (K = 400), and the same technology (A = 100). The economies of the countries are described by the following Cobb–Douglas production functions: North Economy: Y = A L.3K.7 South Economy: Y = A L.7K.3 In which economy is the marginal product of labor larger? Explain.
Using a production possibilities frontier determine how does a country's PPF change in response to the events described below . Make sure to explicit what sort of assumption each event implies (neutral effect or sector biased effect).and what sectors you are representing . The latter follows from your assumptions on the factor intensity of the sector you are representing. 1. Reducing import taxes on primary inputs. 2. The discovery of new mineral deposits in a country.
Consider two competitive economies that have the same quantities of labor and capital (K=L), and the same technology. The economies of the countries are described by the following Cobb–Douglas production func- tions: North Economy: Y = AK^0.7 L^0.3 South Economy: Y = AK^0.3 L^0.7 Compare the total production in these two countries and explain your answer. In which economy is the marginal product of labor larger? Explain your answer. In which economy is the labor’s share of income higher? Explain your answer. If half of workers (L) in North immigrated to South, explain how would total output, marginal produc- tivity of labor, and labor’s share of income in the two economies change?
Germany is the European Union’s largest economy. Suppose that it produces two goods: electricity and food. Electricity (e) is produced with large capital investments (C), especially in green energy, while food (f) is labour intensive (L). This means ae > af. You are given the following graph (graph attached as image to question) determined from the final prices of food and electricity and the optimal capital-labour ratios in the two sectors. From this graph below, explain which sectors production is the largest and why.
Germany is the European Union’s largest economy. Suppose that it produces two goods: electricity and food. Electricity (e) is produced with large capital investments (C), especially in green energy, while food (f) is labour intensive (L). This means ae > af. Draw the situation described above in an Edgeworth Box. Place the origin of electricity in the south-west corner (left-bottom) and the origin of food in the north-east corner (top- right). Measure capital on the vertical axis and labour on the horizontal axis. Draw the contract curve, one isoquant for food, one isoquant for electricity and an efficient point of production.
Q84 The law of one price says that the price of... a. Labour, measured in terms of its opportunity cost, is the same in all markets. b. A product that is costless to transport will be the same in all markets. c. A product is always equal to the absolute cost of the resources that went into its production in any country. d. Natural resources is the same in all markets. e. A product worldwide is always equal to the cost of production from the country with the lowest opportunity cost to make the product.
There are two countries in the world economy: Home and Foreign. Home has 3000 units of labor available. It can produce two goods, coffee (C) and sugar (S). The unit labor requirement in coffee production at home, aLc, is 4, while the unit labor requirement in sugar production, aLs, is 10. Foreign has a labor force of 1600. Foreign’s unit requirement in coffee production, a*Lc, is 10, while the unit labor requirement in sugar production, a*Ls, is 2. Graph the production possibility frontier for both Home and Foreign. Use C in the vertical axis. What is the opportunity cost of coffee in terms of sugar in both Home and Foreign? Using the information (numbers) provided above, construct the world relative supply curve. Label it RS. The horizontal axis must show the world quantity of coffee relative to the world quantity of sugar, i.e., (Qc+Q*c)/(Qs+Q*s). The vertical axis must show the relative price of coffee with respect to the price of…
The table below shows the number of labor minutes it takes for each employee to produce one pizza and one salad. Compare all 3 employees to one another and determine which one of the following statements is true? Select one: a. Carter has a comparative advantage in making Salad b. Carter has an absolute advantage in both products c. Melanie has a comparative advantage in making Pizza d. Jackson has a comparative advantage in making Salad e. Melanie has a comparative advantage in making Salad f. Jackson has an absolute advantage in both products g. Carter has a comparative advantage in making Pizza