🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
19
views
23 Nov 2019

1. Show and describe the short run effects of immigration. Is immigration good in the short run?

2.Assume we have a Hecksher-Ohlin model from class. There are two countries (US, Mexico)

producing two goods (Ipads (I), Jeans (J)). Assume I is relatively capital intensive in

production and the Mexico is relatively capital abundant.

a. State the H-O Theorem. What will be the pattern of trade between the US and Mexico?

b. Show the autarky equilibrium (Indifference curves, price level, quantities).

c. Are your PPF

Watch
1
answer
0
watching
19
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Get unlimited access
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Do all or none

2) The US and Mexico each produce two goods: pizza and beer (I was feeling original). The production of these goods is accomplished via the use of physical capital goods and labor. The factor availability is given below: US Mexico Capital 500 200 Labor 500 300 a) Which country is capital abundant? Which country is labor abundant? The following table gives the per unit input coefficients for pizza and beer production. Pizza Beer Capital 1 2 Labor 1 1 b) Which good is capital intensive in its production? Which is labor intensive? c) What good does the Heckscher-Ohlin model of trade predict will be exported by the US? Which good by Mexico?

3) How would a vacation to Disneyland by Russian tourists be classified in by the BOP accounts? What if the same vacation were taken by U.S. tourists?

4) Explain how the Stolper-Samuelson theorem indicates that free trade will worsen income inequality in the US but narrow it for Mexico.

5) Explain how international factor flows (capital or labor) can substitute for international trade.

6) Explain the difference between a potential Pareto improvement and a Pareto improvement. How is this distinction relevant to international economics

Consider the Heckscher-Ohlin model. The relationships among prices and marginal costs of producing cheese and bicycles at home are represented by the equations. Show work. For rounding purpose, keep two digits after the decimal point.

Pc = 15w + 8r, and Pb = w + r,

where Pc ≡ the price of cheese, Pb ≡ the price of bicycles, r ≡ the rental rate of capital, and w ≡ the wage rate.

a. Which good is the relatively capital intensive good? Why?

b. Under autarky, the price of cheese is $239 and the price of a bicycle is $22. What are the equilibrium wage and rental rates?

c. With trade, the price of bicycle in the home country rises 20 percent while the price of cheese remains the same. According to the Heckscher-Ohlin theorem, is the home country relatively labor abundant or relatively capital abundant? Why

d. What are the equilibrium wage and rental rates after trade at home?

e. Using your answers above, explain the Stolper – Samuelson theorem by describing what happens to the real earnings of labor and the real earnings of capital under trade.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in