16. Suppose country A has abundant labor and scarce capital. Product L requires labor intensive production. Product K requires capitalintensive production. As a result of free trade, in the longruna.The price of Product L will decrease in country AO b. The price of capital will decrease in country AO C.The price of Product K will increase in country AO d. Wages will decrease in country A 22. If two persons are trading in two different categories, he would get best output from one and a little less from the other, this process isknown as:a. Specializationb. Comparative advantageC.Gains from tradeO d. Comparative disadvantage

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16. Suppose country A has abundant labor and scarce capital. Product L requires labor intensive production. Product K requires capital intensive production. As a result of free trade, in the long run a. The price of Product L will decrease in country A O b. The price of capital will decrease in country A The price of Product K will increase in country A C. d. Wages will decrease in country A

16. Suppose country A has abundant labor and scarce capital. Product L requires labor intensive production. Product K requires capital intensive production. As a result of free trade, in the long run a. The price of Product L will decrease in country A O b. The price of capital will decrease in country A The price of Product K will increase in country A C. d. Wages will decrease in country A

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that Country A is capital-endowed. Using the following production functions, which product should country A export? Chairs 2K + 3L Printers ЗК + 2L OChairs, because they are Capital-Intensive. Printers, because they are Capital-Intensive. Printers, because they are Labor-Intensive. Chairs, because they are Labor-Intensive.
The United States and Canada have two factors of production, capital and labor, with which they produce two goods, TV's and Wheat. Technology is the same in the two countries. TV's are Capital-intensive; and the US is capital-abundant. Analyze the effects on the terms of trade and on the two countries' welfare of the following: a) Capital stock increase in the US. b) Labor supply increase in the US. c) Capital stock increase in Canada. d) Labor supply increase in Canada.
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Suppose 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.
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you have been hired by an International Organization to be consulted on various issues that the country Motherland faces. assume that Motherland is a small agricultural economy. 1. Assume that the biggest trading partner of Motherland is the United States. Unlike Motherland, the United States is a large industrial country. What type of trade model can best explain the trade between Motherland and the United States?
Q21 What is meant by the concept of "trade creation"? a. Increased exports and reduced imports as a result of a high-tariff policy. b. Trade based on comparative advantage that typically follows the reduction of trade barriers. c. Regional trade agreements. d. Inefficient trade that follows the establishment of a free-trade area. e. The opening up of new trading routes. Clear my choice
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