Use the following information to answer the question. Consider the Heckscher-Ohlin model. Country A and B...

 

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Use the following information to answer the question. Consider the Heckscher-Ohlin model. Country A and B produce good X and Y using labour (L) and capital (K). Good X production is more labour-intensive than good Y production. Country A is relatively abundant in capital, K(A)/L(A)>K(B)/L(A). Consumers in the two countries have identical homothetic preferences over the two goods. In autarky (no-trade), the price of good X relative to the price of good Y is 2, P(X)/P(Y) = 2 in one of these countries, while it is 0.5, P(X)/P(Y) = 0.5 in the other country. With trades, the relative price becomes 1.1, P(X)/P(Y)=1.1, in both countries. a(Y). Q(Y). 150 100 50 PPF(1) CPF(1) with slope of -1.1 B CPF(2) with slope of -2 CPF(3) with slope of 0.5 250 450600 *a(x) 600 500 300- PPF(2) CPF(4) with slope of -1.1 500 550 600 CPF(5) with slope of -2 CPF(6) with slope of -0.5 Q(x) The graphs above show the production possibility frontiers (PPFS), and consumption possibility frontiers (CPFs) with 3 different relative prices in Countries A and B. Note that you need to find out which graph is for which country. If Country A consumes 650 units of good X with free trade, it will consume write your answer here units of good Y. (rounded to 0 decimal places) Use the following information to answer the question. Consider the Heckscher-Ohlin model. Country A and B produce good X and Y using labour (L) and capital (K). Good X production is more labour-intensive than good Y production. Country A is relatively abundant in capital, K(A)/L(A)>K(B)/L(A). Consumers in the two countries have identical homothetic preferences over the two goods. In autarky (no-trade), the price of good X relative to the price of good Y is 2, P(X)/P(Y) = 2 in one of these countries, while it is 0.5, P(X)/P(Y) = 0.5 in the other country. With trades, the relative price becomes 1.1, P(X)/P(Y)=1.1, in both countries. a(Y). Q(Y). 150 100 50 PPF(1) CPF(1) with slope of -1.1 B CPF(2) with slope of -2 CPF(3) with slope of 0.5 250 450600 *a(x) 600 500 300- PPF(2) CPF(4) with slope of -1.1 500 550 600 CPF(5) with slope of -2 CPF(6) with slope of -0.5 Q(x) The graphs above show the production possibility frontiers (PPFS), and consumption possibility frontiers (CPFs) with 3 different relative prices in Countries A and B. Note that you need to find out which graph is for which country. If Country A consumes 650 units of good X with free trade, it will consume write your answer here units of good Y. (rounded to 0 decimal places)