8. Illustrate the following – Country A imports capital intensive good Y (Y axis) and exports...

8. Illustrate the following – Country A imports capital intensive good Y (Y axis) and exports labor intensive good X (X axis) since this country is labor abundant. Now there is a huge influx of cheap labor into this country making the production of the labor intensive good very efficient. Clearly show the Rybcynzki effect and the immiserizing impact of growth in this large supplier of good X ! 9. Given a small country, compare the impact of “balanced” (growth in both capital and labor) vs. “unbalanced” growth (growth in capital only) if this country is exporting good Y where Y is capital intensive and country is capital abundant! Draw two clear diagrams. How are the two growth impacts slightly different! Explain!

Expert Solution

Rahul Sunny answered 2 years ago

Suppose that a relatively capital-abundant country is exporting the capital- intensive good and importing the labor-intensive...

Suppose that a relatively capital-abundant country is exporting the capital- intensive good and importing the labor-intensive good, but that the “specific- factors” model of Chapter 8 applies rather than the Heckscher-Ohlin model. Assess the effect on the return to labor of the imposition of a tariff on the labor- intensive good.

Will global trade make all capitalists in the U.S. exports capital-intensive good?

Suppose that there are two countries; Country 1 and Country 2. Country 1 is capital abundant and country 2 is labor abundant. X is capital intensive and Y is labor intensive.

Suppose that there are two countries; Country 1 and Country 2. Country 1 is capital abundant and country 2 is labor abundant. X is capital intensive and Y is labor intensive. Assume that Country 1 is a large country and country 2 is a small country.Answer the following questions:a) Suppose that Country I's capital stock increases. Show the pregrowth and after growth production and consumption points on a figure. Clearly explain how the production and consumption of commodity X and...

Good Y is on the vertical axis and good X is on the horizontal axis. If...

Good Y is on the vertical axis and good X is on the horizontal axis. If the slope of the indifference curve is steeper than the slope of the budget line then:MRS < −PX/PY.the consumer is willing to give up more of good Y to get additional units of good X.MRS < PX/PY.the consumer’s utility is maximized.the consumer is willing to give up more of good X to get an additional units of good Y.

1. EXPORTS AND IMPORTS a. Graph a nation that is exporting a good to a trading...

1. EXPORTS AND IMPORTS a. Graph a nation that is exporting a good to a trading partner. Who benefits from the domestic nation exporting to a trading partner? b. On the graph, Identify the amount of good exported, identify the change in domestic consumption and the change in domestic production caused by exporting that good. c. In a separate graph, show a nation importing a good from a trading partner. Who benefits from the domestic nation importing from a trading...

What are the main products that the U.S. exports? Capital intensive goods. Labor intensive goods. Textiles,...

What are the main products that the U.S. exports? Capital intensive goods. Labor intensive goods. Textiles, shoes, electronics Coffee, dairy products, furniture Question When the overall trade balance is zero: Exports equal imports Net exports equal zero. There is no trade surplus or trade deficit. All of the above. Question What is the best argument in favor of free trade? Aiding infant industries. Higher consumption possibilities. All participants in international trade gain a higher standard of living. An decrease in...

With good Y on the y-axis and coffee on the x-axis, (a) Using indifference curves and...

With good Y on the y-axis and coffee on the x-axis, (a) Using indifference curves and budget lines, illustrate three utility-maximizing equilibrium points for Maxwell whose income elasticity of demand for coffee is zero. (b) Is good Y normal or inferior to Maxwell? (c) Explain whether you agree or disagree with the following statement: At each of the three equilibrium points in part (a), MUx/Px = MUy/Py and the marginal utility of money (l) is constant.

4. If a country increases the amount of goods it imports but its exports remain unchanged:...

4. If a country increases the amount of goods it imports but its exports remain unchanged: A. AD would not shift. B. AD shifts right. C. AD shifts left. D. AD would shift but in a random direction. 7. Rising confidence in the economy shifts the aggregate demand curve to the left. A. False B. True 8. An increase in net export spending will result in a(n): A. increase in aggregate supply. B. decrease in aggregate supply. C. increase in...

Suppose when Japan opens to trade, it imports rice, a labor intensive good. According to the...

Suppose when Japan opens to trade, it imports rice, a labor intensive good. According to the Heckscher–Ohlin theorem, is Japan capital abundant or labor abundat? Explain. What is the impact of opening trade on the real wage in Japan? What is the impact of opening trade on the real rental rate on capital? What does the Heckscher Ohlin model assume about labor mobility across industries? Across countries? Which group (capital owners or workers) would support policies to limit free trade?...

Describe and illustrate with a graph what happens if a country that imports food decides to...

Describe and illustrate with a graph what happens if a country that imports food decides to put stronger health and safety regulations on food imports. Specifically, what will happen to: a. Quantities produced and consumed domestically and the imported amount of food; and b. producer and consumer surpluses and the dead weight loss within the importing country, compared to unrestricted free trade. Do the same for the effect of an export subsidy introduced by a food exporting country.

Question