Please make sure that is correct answer and explain each part very much
1.âAccording to the following table, which country is relatively more labor-abundant? Explain your answer. Which country is relatively more capital-abundant?
Japan
Indonesia
Capital
10 machines
30 machines
Labor
20 workers
50 workers
â2.âSuppose that Japan and Indonesia have the factor endowments in the preceding table. Suppose further that the production requirements for a laptop computer are 5 machines and 10 workers, and the requirements for a unit of cloth are 2 machines and 5 workers.
a.âWhich good, computer or cloth, is relatively capital-intensive? Labor-intensive? Explain your answer.
b.âWhich country would export cloth? Why?
â3.âSuppose that before trade takes place, Japan is at a point on its PPC where it produces 15 laptop computers and 10 units of cloth. Once trade becomes possible, the price of a laptop computer is 5 units of cloth. In response, Japan moves along its PPC to a new point where it produces 20 computers and 10 units of cloth. Is the country better off? How do you know?
1.âAccording to the following table, which country is relatively more labor-abundant? Explain your answer. Which country is relatively more capital-abundant?
|
| Japan | Indonesia |
| Capital | 10 machines | 30 machines |
| Labor | 20 workers | 50 workers |
â2.âSuppose that Japan and Indonesia have the factor endowments in the preceding table. Suppose further that the production requirements for a laptop computer are 5 machines and 10 workers, and the requirements for a unit of cloth are 2 machines and 5 workers.
a.âWhich good, computer or cloth, is relatively capital-intensive? Labor-intensive? Explain your answer.
b.âWhich country would export cloth? Why?
â3.âSuppose that before trade takes place, Japan is at a point on its PPC where it produces 15 laptop computers and 10 units of cloth. Once trade becomes possible, the price of a laptop computer is 5 units of cloth. In response, Japan moves along its PPC to a new point where it produces 20 computers and 10 units of cloth. Is the country better off? How do you know?
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Related questions
Draw the graph carefully. Please use one graph per country and show both the autarky and the free trade equilibrium on each graph.
Consider the following data on the factor endowments of two countries A and B:
|
Countries |
||
|
Factor Endowments |
A |
B |
|
Labor force: L |
100 workers |
50 workers |
|
Capital Stock: K |
60 machines |
10 machines |
a. Which country is relatively capital abundant? Which country is relatively labor abundant? Explain (calculate the ratios).
b. Supposing that cars are capital intensive relative to shoes, which country will have a comparative advantage in the production of cars? Of shoes? Explain.
c. Graphically demonstrate the pre-trade and post-trade equilibrium between these two countries (production and consumption points). Draw a Demand Diagonal. Find and label the trade triangles for each country.
d. Which factor gains and which factor loses when trade arises between these two countries? Explain precisely.
1. Use the information in the table below to answer the following questions.
| US | Argentina | |
| wheat | 300 | 20 |
| beef | 100 | 20 |
(a) Does either country have an absolute advantage in the production of wheat or beef? Explain.
(b) What is the opportunity cost of wheat in each country?
(c) What is the opportunity cost of beef in each country?
(d) Analyze comparative advantage and opportunities for trade between the U.S. and Argentina.
2. Suppose that China is labor-abundant country and U.S. is capital-abundant country. iPad is capital-intensive and cloth is labor-intensive. Show that U.S. exports iPad after opening up to trade using Heckscher-Ohlin model.
3. Explain the immiserizing growth using standard trade model.
4. Consider the following Heckscher-Ohlin model: there are two countries, America and China, two goods, high-tech manufactures and low-tech manufactures, and two factors of production, skilled labor and unskilled labor. America is skilled-labor abundant and China is unskilled-labor abundant. High-tech manufactures are skilled-labor intensive and low-tech manufactures are unskilled-labor intensive. What happens to the price of high-tech manufactures relative to the price of low-tech manufactures in America following trade?
