Question
In: Economics
Consider international trade in a world with two countries, Home and Foreign, and a single good....
Consider international trade in a world with two countries, Home and Foreign, and a single good. At Home, the demand is D = 500 - 2P and the supply is S = 200 + 4P. At Foreign, the demand is D* = 600 - 2P and the supply is S* = 360 + 2P.
How do I find the consumer and producer surplus in autarky?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
International Economics Question!! Home and Foreign are two countries that produce cloth and food, and trade...
International Economics Question!!
Home and Foreign are two countries that produce cloth and food,
and trade these goods with each other. Both goods require labor as
an input. Capital is an input for cloth production, and land is an
input for food production. In other words, capital and land are
specific factors for cloth and food production respectively. There
are diminishing returns to labor.
Suppose that the capital stock of Home increases due to an
external shock.
a) How would...
Consider a world with two countries, Home and Foreign, both able to produce two goods: cloth...
Consider a world with two countries, Home and Foreign, both able
to produce two goods: cloth and tablet computers. The production of
both goods uses
capital and labor in fixed proportions, with the tablets industry
using more capital per worker than the cloth industry. The units of
each input needed to produce one unit output are given by:
capital
Labor
Cloth
1
2
Tablets
2
1
Both countries have 150 units of capital available for production,
but the Home country...
Consider a specific-factors world consisting of two countries, Home (H) and Foreign (F), and two goods,...
Consider a specific-factors world consisting of two countries,
Home (H) and Foreign (F), and two goods, coffee (C) and doughnuts
(D). Home has 120 units of labour that are mobile between
industries and immobile internationally, some capital owners that
are involved in doughnut production and some landowners that are
involved in coffee production. Capital and land is immobile between
industries and internationally. The marginal product of labour in
each industry is given by MPLC = 120 − LC and MPLD...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries...
Consider the following model of trade between Home and Foreign.
Assume throughout that those two countries are the only two
countries in the world, at least for purposes of trade. There are
two goods: Corn and Radio. Consumers always spend one-third of
their income on Corn and the remainder on Radios. The only factor
of production is labour. Each home country worker can produce 2
units of Corn or 3 units of Radios per unit of time, while each
foreign...
Assume that there are two countries in the world: Home and Foreign. Home’s demand curve for...
Assume that there are two countries in the world: Home and
Foreign. Home’s demand curve for wheat is D = 125 - 25P and supply
curve is S = 20 + 40P. Suppose that Foreign is a much larger
country, with domestic demand D* = 1100 - 300P and supply S* = 650
+ 200P.
a) What would the price of wheat be in case of no trade in Home?
b) What would the price of wheat be in case...
Consider two countries, Home and Foreign, trading two goods, Rice and Car. The Home country is...
Consider two countries, Home and Foreign, trading two goods,
Rice and Car. The Home country is endowed with abundant capital
relative to labor and hence has a comparative advantage to
specialize in Cars; whereas the Foreign country is endowed with
abundant labor and specializes in Rice. Once they start trading,
the price of cars decreases, and the price of rice increases in the
Foreign country. How would the increase in the price of
rice affect the income of each of...
Consider two countries, Home and Foreign, trading two goods, Rice and Car. The Home country is...
Consider two countries, Home and Foreign, trading two goods,
Rice and Car. The Home country is endowed with abundant capital
relative to labor and hence has comparative advantage to specialize
in Cars; whereas the Foreign country is endowed with abundant labor
and specializes in Rice. Once they start trading, the price of car
decreases, and the price of rice increases in the Foreign country.
How would the decrease in the price of car affect the income of
each of the...
Consider two countries, Home and Foreign, with variables in Foreign denoted by asterisks ("*"). Let Y...
Consider two countries, Home and Foreign, with variables in
Foreign denoted by asterisks ("*"). Let Y = 2,000, M =
400, P = 1.25; and Y* = 1,500, M* =
300, P* = 2.00. Suppose the demand for liquidity
takes the same form in both countries, that is, L(R, Y) = L*
(R, Y) = 2Y/100R (notice that the functions have the same
form, but in each country the values of Y and R
are different). (Advice: once again, don't...
Consider two countries, Home and Foreign, with variables in Foreign denoted by asterisks ("*"). Let Y...
Consider two countries, Home and Foreign, with variables in
Foreign denoted by asterisks ("*"). Let Y = 2,000, M =
400, P = 1.25; and Y* = 1,500, M* =
300, P* = 2.00. Suppose the demand for liquidity
takes the same form in both countries, that is, L(R, Y) = L*
(R, Y) = 2Y/100R (notice that the functions have the same
form, but in each country the values of Y and R
are different). (Advice: once again, don't...
There are two countries, Home and Foreign. The two countries are identical except that Home has...
There are two
countries, Home and Foreign. The two countries are identical except
that Home has a labor force of 100 and Foreign has a labor force of
200. Given this allocation of labor across Home and Foreign, the
value of the marginal product of labor in Home is 30 and the value
of the marginal product of labor in Foreign is 20. If labor were to
be free to move, the wage in both countries would be25.
fi mmigration...
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