Q: Canada and Australia are (mainly) English-speaking countries with
Canada and Australia are (mainly) English-speaking countries with populations that are not too different in size (Canada’s is 60 percent larger). But Canadian trade is twice as large, relative to GDP,...
See AnswerQ: We have focused on the case of trade involving only two countries
We have focused on the case of trade involving only two countries. Suppose that there are many countries capable of producing two goods, and that each country has only one factor of production, labor....
See AnswerQ: Home has 1,200 units of labor available. It can
Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. a. Graph Home’s producti...
See AnswerQ: Home is as described in problem 1. There is now also
Home is as described in problem 1. There is now also another country, Foreign, with a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in banana production it is 1....
See AnswerQ: Now suppose world relative demand takes the following form: Demand for
Now suppose world relative demand takes the following form: Demand for apples>demand for bananas = price of bananas>price of apples. a. Graph the relative demand curve along with the relative supply c...
See AnswerQ: Suppose that instead of 1,200 workers, Home has 2
Suppose that instead of 1,200 workers, Home has 2,400. Find the equilibrium relative price. What can you say about the efficiency of world production and the division of the gains from trade between H...
See AnswerQ: In 1986, the price of oil on world markets dropped sharply
In 1986, the price of oil on world markets dropped sharply. Since the United States is an oil-importing country, this was widely regarded as good for the U.S. economy. Yet in Texas and Louisiana, 1986...
See AnswerQ: An economy can produce good 1 using labor and capital and good
An economy can produce good 1 using labor and capital and good 2 using labor and land. The total supply of labor is 100 units. Given the supply of capital, the outputs of the two goods depend on labor...
See AnswerQ: The marginal product of labor curves corresponding to the production functions in
The marginal product of labor curves corresponding to the production functions in problem 2 are as follows: Data from Problem 2: An economy can produce good 1 using labor and capital and good 2 usi...
See AnswerQ: Consider two countries (Home and Foreign) that produce goods 1
Consider two countries (Home and Foreign) that produce goods 1 (with labor and capital) and 2 (with labor and land) according to the production functions described in problems 2 and 3. Initially, both...
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