There are two countries, England and USA, in a world where there are only two factors...

There are two countries, England and USA, in a world where there are only two factors of production, land and labor. England has 8 million acres of land and 2 million workers while USA has 5 million acres of land and 1 million workers. Both countries produce two goods, cars and watches, using identical technology. Per acre of land, the production of cars requires 4 workers while the production of watches requires 1 worker.

Using a PPF/indifference curve graph, illustrate the effects of opening trade on USA. Be sure to show the initial autarky equilibrium, the new international price, the new production and consumption points, and the amounts exported and imported?

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Rahul Sunny answered 1 year ago

Assume that there are only two countries in the world: USA and Brazil, so all international...

Assume that there are only two countries in the world: USA and Brazil, so all international transactions are only between those two countries. The table gives the information regarding international transactions of USA in 2018: ITEM Billions of US Dollars Imports of goods from Brazil 185 Imports of services from Brazil 120 Foreign direct investment by Brazil to the USA 14 Exports of goods to Brazil 238 Exports of services to Brazil 155 US investment to Brazil 110 Income received...

Assume that there are only two countries in the world: USA and Brazil, so all international...

Assume that there are only two countries in the world: USA and Brazil, so all international transactions are only between those two countries. The table gives the information regarding international transactions of USA in 2018: ITEM Billions of US Dollars Imports of goods from Brazil 185 Imports of services from Brazil 120 Foreign direct investment by Brazil to the USA 14 Exports of goods to Brazil 238 Exports of services to Brazil 155 US investment to Brazil 110 Income received...

Consider two countries, Spain and Italy, where the only two factors of production are capital and...

Consider two countries, Spain and Italy, where the only two factors of production are capital and labor. Spain has 100 units of capital and 400 units of labor and Italy has 200 units of capital and 100 units of labor. Both countries produce two goods, cheese and suits. The labor share in total production costs is 75% for cheese but only 25% for suits. (2 points for each part) A. Which country is labor abundant? Explain. ( very helpful if...

Consider a world with two countries - USA and Foreign and a competitive market of sugar...

Consider a world with two countries - USA and Foreign and a competitive market of sugar in both countries. Foreign is more efficient in the production of sugar and in a free trade equilibrium, US would import part of its consumption of sugar. Describe graphically such trading equilibrium of sugar. What would be the effect on the sugar price in USA and on the welfare (measured by consumer surplus, producer surplus and tariff revenue) of US when US imposes an...

Assume that there are only two countries in the world, Atlantica and Pacifica. Both countries produce...

Assume that there are only two countries in the world, Atlantica and Pacifica. Both countries produce and consume surfboards. The pre-trade equilibrium price of surfboards in Atlantica is $300 and the pre-trade price of surfboards in Pacifica is $400. a) Draw a three-graph diagram to depict the Pacifica, Atlantica, and international markets for surfboards. Assume that free trade opens up between Pacifica and Atlantica yielding an international price of $375 with 10,000 surfboards being traded. Be sure to label all...

Suppose that there are only two small countries in the world: Ascot, with a population of...

Suppose that there are only two small countries in the world: Ascot, with a population of 29,400 people, and Delwich, with a population of 21,000 people. Ascot's GDP is equal to $150 million while Delwich's GDP is $210 million. Delwich's GNP has been estimated to be equal to $240 million. The revenue earned by firms that operate in Delwich but are headquartered in Ascot is equal to $60 million. Given the data above, Ascot's GNP is $___ million. (Enter your...

Comparative Advantage There are two countries in the world. There are also only two different types...

Comparative Advantage There are two countries in the world. There are also only two different types of goods produced, food and clothing. Each country has the same amount of “inputs” (i.e. labor, capital, raw materials, etc.), which amounts to 100,000 units of input. Below is a chart that lists out how many units of output each country could create if they created just one type of good. For example, if Country A produced ONLY food, then with 100,000 units of...

Comparative Advantage There are two countries in the world. There are also only two different types...

Comparative Advantage There are two countries in the world. There are also only two different types of goods produced, food and clothing. Each country has the same amount of “inputs” (i.e. labor, capital, raw materials, etc.), which amounts to 100,000 units of input. Below is a chart that lists out how many units of output each country could create if they created just one type of good. For example, if Country A produced ONLY food, then with 100,000 units of...

Suppose there are two countries, USA and Japan. USA is regarded as the home country and...

Suppose there are two countries, USA and Japan. USA is regarded as the home country and Japan is the foreign country. USA has 100 units of labor available and Japan has 80 units of labor. Both countries can produce only two goods, airplanes and cars. The output per hour of labor in the production of airplanes in the USA is 12, while in car production the output per hour of labor is 6. In Japan, the output per hour of...

Suppose there are only two countries in our world Australia and New Zealand. In a year...

Suppose there are only two countries in our world Australia and New Zealand. In a year Australia can produce 100 Sheep or 500 BBQs while New Zealand can produce either 150 Sheep or 400 BBQs. What is the PPC curve? If they were to specialise who would and in what BBQs or Sheep? If both countries were to spend half the year producing each of their products- explain how specialization and trade would benefit each?

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There are two countries, England and USA, in a world where there are only two factors...

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