Use the following information to answer the homework: Home 25 Foreign 100 MPL Wheat 3 2...

 

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Use the following information to answer the homework: Home 25 Foreign 100 MPL Wheat 3 2 Cloth 4 1 Assume no-trade in problems a-h What is the relative price of wheat (Pw/Pc) in the home country? In the foreign country? а. b. What is the real wage in terms of wheat in the home country? In terms of cloth in the home country? What is the real wage in terms of wheat in the foreign country? C. In terms of cloth in the foreign country? Suppose the price of wheat is $5. What is the value of the nominal wage (W) in the home country? d. Which country has an absolute advantage in cloth? Which country has an absolute advantage in wheat? e. f. cloth? Which country has a comparative advantage in wheat? In g. Sketch home's production possibilities frontier, showing wheat on the horizontal axis and cloth on the vertical axis. Show the values of the horizontal and vertical intercepts. Suppose the home country consumes 40 units of cloth. its wheat consumption? h. What is Use the following information to answer the homework: Home 25 Foreign 100 MPL Wheat 3 2 Cloth 4 1 Assume no-trade in problems a-h What is the relative price of wheat (Pw/Pc) in the home country? In the foreign country? а. b. What is the real wage in terms of wheat in the home country? In terms of cloth in the home country? What is the real wage in terms of wheat in the foreign country? C. In terms of cloth in the foreign country? Suppose the price of wheat is $5. What is the value of the nominal wage (W) in the home country? d. Which country has an absolute advantage in cloth? Which country has an absolute advantage in wheat? e. f. cloth? Which country has a comparative advantage in wheat? In g. Sketch home's production possibilities frontier, showing wheat on the horizontal axis and cloth on the vertical axis. Show the values of the horizontal and vertical intercepts. Suppose the home country consumes 40 units of cloth. its wheat consumption? h. What is

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e To know which country has absolute advantage in which production we have to calculate the total pr... View the full answer