Suppose country A has 5000 units of capital and 2000 units of labor while country B has 6000 units of capital and 3000 units of labor: A: Which country is capital abundant and which one is labor abundant? Explain! Now suppose the production one unit of good X requires 3 units of capital and 2 units of labor and the production of one unit of good Y requires 6 units of capital and 3 units of labor. B: Which good is the capital intensive good and which one is the labor intensive good? Explain!! C: Which country should specialize in and export good X and which country should specialize in and export good Y. Explain!!! D: Using appropriate graphs, demonstrate that trade is beneficial if two countries have identical technology but different preferences. Does a country specialize in producing the good where they have the strongest preference? Explain DO D Foe answers for A, B and C - https://www.bartleby.com/questions-and-answers/suppose-country-a-has-5000-units-of-capital-and-2000-units-of-labor-while-country-b-has-6000-units-o/38c72dbb-aa7f-4a37-b90d-14581dbe5f4c
Suppose country A has 5000 units of capital and 2000 units of labor while country B has 6000 units of capital and 3000 units of labor:
A: Which country is capital abundant and which one is labor abundant? Explain!
Now suppose the production one unit of good X requires 3 units of capital and 2 units of labor and the production of one unit of good Y requires 6 units of capital and 3 units of labor.
B: Which good is the capital intensive good and which one is the labor intensive good? Explain!!
C: Which country should specialize in and export good X and which country should specialize in and export good Y. Explain!!!
D: Using appropriate graphs, demonstrate that trade is beneficial if two countries have identical technology but different preferences. Does a country specialize in producing the good where they have the strongest preference? Explain
DO D
Foe answers for A, B and C - https://www.bartleby.com/questions-and-answers/suppose-country-a-has-5000-units-of-capital-and-2000-units-of-labor-while-country-b-has-6000-units-o/38c72dbb-aa7f-4a37-b90d-14581dbe5f4c
Trending now
This is a popular solution!
Step by step
Solved in 4 steps