Question

In: Economics

Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories...

Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country:

Computers Shoes Sales revenue = PCQC = 100 Sales revenue = PSQS = 100 Payments to labor = W LC = 50 Payments to labor = W LS = 10 Payments to capital = RKC = 50 Payments to labor = RKS = 90 Percentage increase in the price = ∆PC PC = 0% Percentage increase in the price = ∆PS PS = 40%

a. Which industry is capital-intensive?

b. Given the percentage changes in output prices in the data provided, calculate the percentage change in the rental on capital.

c. How does the magnitude of this change compare with that of change in the earnings of labor?

d. Which factor gains in real terms, and which factor loses? Are these results consistent with the Stohlper-Samuelson theorem?

Solutions

Expert Solution

Solution for the above Problem

Plz follow the page numbers:

***********************************Thank You******************************

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories...
Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country: Shoes:  Sales revenue = Ps x Qs = 100 , Payments to labor = W x Ls = 10 , Payments to labor = R x Ks = 90 , Percentage increase in the price = ∆Ps/Ps = 40% Computers: Sales revenue = Pc x Qc = 100,  Payments to labor...
Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories...
Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country: Computers:       Sales revenue = ?c?? = 100 Payments to labor = ??? = 50 Payments to capital = ??? = 50 Percentage decrease in the price = ∆??⁄?? = -10% Shoes:                 Sales revenue = ???? = 100 Payments to labor = ??? = 20 Payments to capital...
6. Suppose that there are drastic technological improvements in shoe production in Home such that shoe...
6. Suppose that there are drastic technological improvements in shoe production in Home such that shoe factories can operate almost completely with computer-aided machines. Consider the following data for the Home country: Computers: Sales revenue = ?c?? = 100 Payments to labor = ??? = 50 Payments to capital = ??? = 50 Percentage increase in the price = ∆??⁄?? = 0% Shoes: Sales revenue = ???? = 100 Payments to labor = ??? = 20 Payments to capital =...
Discuss how technological improvements change the postition of LRAS. Refer to production function in your explanation.
Discuss how technological improvements change the postition of LRAS. Refer to production function in your explanation.
Suppose a manufacturing firm has two factories (Factory 1 and Factory 2), and a single production...
Suppose a manufacturing firm has two factories (Factory 1 and Factory 2), and a single production process (Process A) that is used in both factories. A new process (Process B) is developed that potentially reduces production costs. To test whether Process B is less costly than Process A, an experiment is designed where: Within each Factory, products are assigned randomly to Process A or Process B. Production costs for each product are recorded. Note that resources (i.e. materials, workers, equipment)...
With all the so-called budget improvements, technological and programmatic, why is that governments don’t achieve better...
With all the so-called budget improvements, technological and programmatic, why is that governments don’t achieve better results through the process?
A company has production factories in Vancouver, Montreal, and Toronto. There are three different production defects...
A company has production factories in Vancouver, Montreal, and Toronto. There are three different production defects that can arise in the production process, we’ll call them defect A, defect B and defect C. During a recent week, the factories in the three cities reported the following occurrences of the three types of product defects: Vancouver Montreal Toronto Defect A 19 26 12 Defect B 21 16 28 Defect C 23 20 45 (a) Which factory has the highest percentage of...
Suppose an economy experiences an increase in technological progress. This increase in technological progress will A....
Suppose an economy experiences an increase in technological progress. This increase in technological progress will A. Allow more output to be produced with the same number of workers B. Allow the same amount of output to be produced with fewer workers C. Lead to changes in the types of goods produced D. All of the above E. None of the above
Miguel recently purchased his first home. He is very excited about making improvements to the home....
Miguel recently purchased his first home. He is very excited about making improvements to the home. He decides it would be cheaper if he had his own water source so he digs a well in his backyard. Next he decides to construct a large building right next to the edge of his property. The following spring, Miguel gets a letter from his neighbor Stephen claiming Miguel has stolen Stephen's water source by digging a well. Miguel decides not to say...
Consider a PPF which illustrates the trade-off between tangible goods and intangible services. If technological improvements...
Consider a PPF which illustrates the trade-off between tangible goods and intangible services. If technological improvements raise productivity in the tangible good sector but not in the intangible service sector, A-The opportunity cost of intangible services goes up. B-The opportunity cost of tangible goods goes up. C-The opportunity cost of the two goods does not change Suppose that different ways of organizing a society produce different levels of income for two different groups of citizens, natives and newbies. Both groups...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT