MICROECONOMICS CONNECT ACCESS CODE ONL
21st Edition
ISBN: 9781260720853
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 25, Problem 10DQ
To determine
Free movement and the international movement of labor.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
American apparel makers complain to Congress about competition from China. Congress decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer? LO26.4 a. Tariff. b. Quota.
In Country A, the production of 1 bicycle requires using resources that could otherwise be used to produce 11 lamps. In Country B, the production of 1 bicycle requires using resources that could otherwise be used to produce 15 lamps. Which country has a comparative advantage in making bicycles? LO26.2 a. Country A. b. Country B
Assume we are in a Ricardian world, where there are 2 countries: Home and Foreign, 2 goods: x and y, and one factor of production: Labor(L). The labor unit requirements for production of each good and the aggregate labor supply in each country are given as follows:
Home country: ax= 4, ay= 3, L= 2400
Foreign country: a*x= 10, a*y= 6, L= 3000
d) If there is no trade between Home and Foreign, what will the relative price of x in terms of y be in each country?
Chapter 25 Solutions
MICROECONOMICS CONNECT ACCESS CODE ONL
Knowledge Booster
Similar questions
- 16 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? a.The relative wage is w/w*=8 b. Country 2 produces 100 manufactures and exports 80 manufactures c.Country 1 produces 400 services and exports 80 services d.All of the other optionsarrow_forward1. Try to describe the global economic crisis on world trade and commodity prices because of the COVID and use the Stopler-Samuelson theorem to predict the effect on income distribution in Australia. It should be imagined Australia is a specific factor economy with 'mining' in Queensland and Western Australia on the one hand, and a sector included manufacturing, agriculture and services in the other states. Assume that there is mobile labour between these two sectors, that there is no unemployment, and that Australia is a price taker for its exports.arrow_forwardUse the accompanying table for Neon and Zeon to answer the questions that follow. Assume that the wage rate shown equals hourly output and income and that the accumulated output and income are the sum of the marginal revenue products (MRPs) of each worker. a. Which country has the greater stock of capital and technological prowess? How can you tell?b. Suppose the equilibrium wage rate is $19 in Neon and $7 in Zeon. What is the domestic output (= domestic income) in the two countries?c. Assuming zero migration costs and initial wage rates of $19 in Neon and $7 in Zeon, how many workers will move to Neon? Why will not more than that number of workers move to Neon?d. After the move of workers, what will the equilibrium wage rate be in each country? What will the domestic output be after the migration? What is the amount of the combined gain in domestic output produced by the migration? Which country will gain output; which will lose output? How will the income of native-born workers be…arrow_forward
- Assume that the comparative-cost ratios of two products— baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata: Canswicki: 1 can baby formula ≡ 2 cans tuna fish Tunata: 1 can baby formula ≡ 4 cans tuna fishIn what product should each nation specialize? Which of the following terms of trade would be acceptable to both nations: (a) 1 can baby formula ≡ 2 1 2 cans tuna fish; (b) 1 can baby formula ≡ 1 can tuna fish; (c) 1 can baby formula ≡ 5 cans tuna fish?arrow_forwardPlease no written by hand solutions Question 1: State whether each of the following statements is true or false. Justify for all statements and illustrate graphically/numerically whenever necessary. 1. The steeper the supply and demand curves for a certain commodity, the lower the trade and revenue effects of a tariff imposed on imports of such commodity. 2. With a positive nominal tariff on the final commodity, more of the commodity is produced domestically than would be under free trade. 3. If imported inputs constitute half the value of the final commodity and are admitted duty free, then the rate of effective protection is equal to the nominal tariff rate on the final commodity. 4. Export subsidies can be regarded as a form of dumping.arrow_forwardBelow is the data for the maximum production of the only two products for the countries of Oz and Zas. Oz: 14 food units 22 equipment units Zas: 26 food units or 14 equipment units a. If each country is self-sufficient, with no trade between them, and each uses one-half of their resources to produce each of the two products, what is the output in each country. Fill in the table below. Country Output of food units Output of equipment units Oz Zas b. Based on part (a), total production of food is units and total production of equipment is units c. If, instead, each country specializes and produces only the product that it can produce best, what will be the output in each country? Fill in the table below. Country Output of food units Output of equipment units Oz Zas d. Now, based on part (c), total production of food is _____ units and total production of equipment is ____units. e. The gains as a result of specialization are ___ more units of food produced and _____more units of equipment…arrow_forward
- Brazil and Colombia can both produce either bananas or coffee. Brazil can produce either 16 pounds of co and 0 pounds of coffee. Colombia can produce either 20 pounds of coffee and 0 pounds of bananas or 4 Bananas (pounds) Coffee (pounds) Country Brazil 64 Colombia 40 20 The opportunity cost of producing 1 pound of bananas for Brazil is O 16 O 1 O 0.25 16 O 48 pounds of coffee.arrow_forward2. Suppose that the United States and Mexico are the only two countries in the world and that labor is the only productive input. In the United States, a worker can produce 12 bushels of wheat or 2 barrels of oil in a day. In Mexico, a worker can produce 2 bushels of wheat or 4 barrels of oil per day. a. What will be the price ratio between the two commodities (that is, the price of oil in terms of wheat) in each country if there is no trade? b. If free trade is allowed and there are no transportation costs, which commodity would the United States import? What about Mexico? c. In what range would the price ratio have to fall under free trade? Why?arrow_forwardSuppose country A and B have a labour force of 1 and produce hops and barley using only labour. Country A's unit labour cost are 0.5 for hops and 0.5 for barley, country B's 0.2 for hops and 0.4 for barley. Suppose that both are needed to brew beer in equal quantitiy, so that both national and international demand has the property that equal amounts of barley and hops are demanded. How much more beer (as a percentage) will be brewed under international trade than in autarky? Please enter the percentage rounded to a whole number (up or down is both acceptable) without the percentage sign.arrow_forward
- Suppose Big Country can produce 80 units of X by using all its resources to produce X or 60 units of Y by devoting all its resources to Y. Comparable figures for Small Nation are 60 units of X and 60 units of Y. Assuming constant costs, in which product should each nation specialize? Explain why. What are the limits of the terms of trade between these two countries? How would rising costs (rather than constant costs) affect the extent of specialization and trade between these two countries?arrow_forwardQ58 Suppose Spain is currently producing 90 units of wine and 10 units of cheese, but to produce 10 more units of cheese it must sacrifice 30 units of wine. Further, suppose that Portugal produces 45 units of wine and 45 units of cheese, but to produce 10 more units of cheese it must sacrifice only 10 units of wine. It can be concluded that... a. More information is needed to conclude anything about comparative advantage in either country. b. Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production. c. Spain has a comparative advantage in the production of wine and Portugal has a comparative advantage in the production of cheese. d. Spain has an absolute advantage in both wine and cheese production. e. Portugal has an absolute advantage in both wine and cheese production.arrow_forwardAssume the value of a country's currency is 1 when the price level is 1.2. Instructions: Enter your answers rounded to 2 decimal places. If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. If the price level changes to 1.4, by how much in percentage terms will the value of the country's currency change? percent Now assume that the value of the country's currency is equal to 1 when the price level is 2. If the price level changes to 0.8, by how much will the value of the country's currency change? percentarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)EconomicsISBN:9781305971509Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:Cengage Learning