Question: please answer question 1 and 2 Consider a world with two countries only Home and Foreign. Two goods, computers and shoes, are produced and consumed.

please answer question 1 and 2 please answer question 1 and 2 Consider a world with two countries

Consider a world with two countries only Home and Foreign. Two goods, computers and shoes, are produced and consumed. The autarky equilibrium price is P/Ps = 3.5 in Foreign and 1 in Home. In the free trade equilibrium, the international equilibrium price is P/Ps =2, and 100 units of computer is traded internationally. The table below lists the information at the autarky equilibrium in Home country. Sales Revenue Total Payment to Labour Shoe Industry 400 200 Computer Industry 600 200 Question 1 (4 points) A units of (computers, shoes) With trade, Home exports and imports A units of (computers, shoes) A Answer the new two questions based on the following. Consider a short-run scenario, where the capital in the shoe production and the capital in the computer production are specific factors and labour is the only mobile factor in the economy. Normalize price of shoes to 1. Question 2 (1 point) Suppose that going from autarky equilibrium to trade equilibrium, the wage rate in the country changes 30% (can be positive or negative). What is the percentage change of the rent paid to the capital in the shoe industry? Please write down the numerical value in front of the %. Consider a world with two countries only Home and Foreign. Two goods, computers and shoes, are produced and consumed. The autarky equilibrium price is P/Ps = 3.5 in Foreign and 1 in Home. In the free trade equilibrium, the international equilibrium price is P/Ps =2, and 100 units of computer is traded internationally. The table below lists the information at the autarky equilibrium in Home country. Sales Revenue Total Payment to Labour Shoe Industry 400 200 Computer Industry 600 200 Question 1 (4 points) A units of (computers, shoes) With trade, Home exports and imports A units of (computers, shoes) A Answer the new two questions based on the following. Consider a short-run scenario, where the capital in the shoe production and the capital in the computer production are specific factors and labour is the only mobile factor in the economy. Normalize price of shoes to 1. Question 2 (1 point) Suppose that going from autarky equilibrium to trade equilibrium, the wage rate in the country changes 30% (can be positive or negative). What is the percentage change of the rent paid to the capital in the shoe industry? Please write down the numerical value in front of the %

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