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20 Nov 2019
Assume the world includes Canada and the EU who both produce lumber and automobiles using land and capital in a model that follows the assumptions of the Heckscher-Ohlin model of land abundant (and lumber is land intensive). The figure below show Canada's initial PPF international terms of trade (tt I), production (PI), consumption (C1) and trade triangle under an initial free trade equilibrium. 9. trade. Canada is Canada Pl Cl t i automobiles Suppose Canada experiences biased growth in land, meaning both factors grow, but land grows faster than capital. Assuming the small country case: i. Draw the new PPF to reflect this growth and a plausible new international terms of trade (tt2), a. production (P2), consumption (C2) and trade triangle. ii. Explain your results carefully. What factors affect Canada's willingness to trade?
Assume the world includes Canada and the EU who both produce lumber and automobiles using land and capital in a model that follows the assumptions of the Heckscher-Ohlin model of land abundant (and lumber is land intensive). The figure below show Canada's initial PPF international terms of trade (tt I), production (PI), consumption (C1) and trade triangle under an initial free trade equilibrium. 9. trade. Canada is Canada Pl Cl t i automobiles Suppose Canada experiences biased growth in land, meaning both factors grow, but land grows faster than capital. Assuming the small country case: i. Draw the new PPF to reflect this growth and a plausible new international terms of trade (tt2), a. production (P2), consumption (C2) and trade triangle. ii. Explain your results carefully. What factors affect Canada's willingness to trade?
18 Feb 2024
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Tod ThielLv2
28 Jul 2019
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