Consider a Heckscher-Ohlin model with two countries (Home & Foreign), two goods (Cloth & Food), and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider a Heckscher-Ohlin model with two countries (Home & Foreign), two goods (Cloth & Food), and two production inputs (L and K). In equilibrium (with free trade), the prices are Pc = 14 and PF = 8. At these equilibrium prices, the labor and capital requirements of producing one unit of cloth is aLc = 2 and akc = 4. The labor and capital requirements of producing one unit of food is aLF = 2 and akF 1. Numbers in the table below are factor endowments of each country. = Home Foreign L 60 30 K 90 30 (A) (5%) Which country is labor abundant? Which country is capital abundant? (B) (5%) Which product is labor intensive? Which product is capital intensive? (C) (10%) What are the wage of labor (w) and interest of capital (r)? (D) (10%) What are the output levels of cloth and food in Home? In Foreign? (E) (5%) What products does Home export and import? How about Foreign? Consider a Heckscher-Ohlin model with two countries (Home & Foreign), two goods (Cloth & Food), and two production inputs (L and K). In equilibrium (with free trade), the prices are Pc = 14 and PF = 8. At these equilibrium prices, the labor and capital requirements of producing one unit of cloth is aLc = 2 and akc = 4. The labor and capital requirements of producing one unit of food is aLF = 2 and akF 1. Numbers in the table below are factor endowments of each country. = Home Foreign L 60 30 K 90 30 (A) (5%) Which country is labor abundant? Which country is capital abundant? (B) (5%) Which product is labor intensive? Which product is capital intensive? (C) (10%) What are the wage of labor (w) and interest of capital (r)? (D) (10%) What are the output levels of cloth and food in Home? In Foreign? (E) (5%) What products does Home export and import? How about Foreign?
Expert Answer:
Answer rating: 100% (QA)
Answer A B c 0 E Pc 14 ALC 2 aLk 2 Home felism Avis weer Country L Comt... View the full answer
Related Book For
Posted Date:
Students also viewed these mathematics questions
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...
-
The earliest statement of the principle of comparative advantage is associated with B) David Ricardo. A) David Hume_ C) Adam Smith D) Eli Heckscher E) Bertil Ohlin 2 * The comparative advantage is...
-
can you complete this concept map that reviews some key ideas about species and speciation logy with Lab Connecting the Concepts: Species and Speciation oncepts: Species and Speciation oncept map...
-
At the beginning of 2013, the Bradley Company had the following balances in its accounts: During 2013, the company experienced the following events: 1. Purchased inventory that cost $4,400 on account...
-
Water and diethyl ether are immiscible liquids. Charged compounds dissolve in water, and uncharged compounds dissolve in ether. a. What pH would you make the water layer in order to cause both...
-
How much noisier are streets where cars travel faster? The following table presents noise levels in decibels and average speed in kilometers per hour for a sample of roads. a. Compute the...
-
What is the probability of finding a particle in a box of length L in the region between x = L/4 and x = 3L/4 when the particle is in (a) The ground level and (b) The first excited level? (c) Are...
-
A business loan of $25,000 at 5% compounded quarterly is repaid by a payment of $250 at the end of each month. how many payments are required to settle the loan? what is the principal portion of the...
-
On January 1, 2024, Palmer Company acquired a 90% interest in Stevens Company at a cost of $1,000,000. At the purchase date, Stevens Companys stockholders equity consisted of the following: An...
-
Free market capitalism is driven by supply and demand, For the most part, supply is the business and demand is the consumer however a major signal is a price The behavior of buyers and sellers...
-
Which of the following is not correct concerning the processing of transactions through the online input of transactions at a computer terminal? a. Batch controls cannot be used. b. Oral verification...
-
Which of the following errors would be detected by batch controls? a. A fictitious employee was added to the processing of the weekly time cards by the computer operator. b. An employee who worked...
-
What are the implications of globalization when you have to look for a job? What can you do to prepare yourself for competing in a globalized business environment? How would knowledge of information...
-
What are the principles of a database management system? Define a database management system (DBMS), describe how it works, and explain how it benefit organizations. Define and compare the logical...
-
What are the most important contemporary hardware and software trends? Define and describe the mobile digital platform, nanotechnology, grid computing, cloud computing, autonomic computing,...
-
What is the role of an occupational therapist who is part of an early intervention team? What are the different responsibilities of this profession? What are some examples of how this role relates to...
-
The Smiths buy a house. They borrow 80 percent of the purchase price from the local ABC Savings and Loan. Before they make their first payment, ABC transfers the right to receive mortgage payments to...
-
Now, repeat Question 2, but with the following different assumption on preferences. If we denote goods consumption by G and leisure by L, assume that the household's preferences are such that the...
-
In the model in the text, comparative advantage comes from a pure technological difference between the countries. Identify some other differences that might drive comparative advantage? Provide...
-
Again for the fiscal example of Section 17.4.5, calculate each U.S. worker's consumption of the two goods with x = 0 and with x = 1. How would you describe the effect of the PBC's currency...
-
Owing to a small federal grant from the Department of Housing and Urban Development (HUD) to the Town of Stillman, Nadine Gordimer, CPA has performed grant audits for the town in each of the past...
-
A public accounting firm has been engaged to perform the audit of a local, federally funded Housing Allowance Program. The objective of the program is to increase the housing standards of Agana...
-
The City of Central Falls has engaged Robert Cohen, CPA to audit the June 30, 1999 financial statements of the City's Water Department under the GAO's Government Auditing Standards. Cohen's report...
Study smarter with the SolutionInn App