Question
In: Economics
Two countries: US and Mexico. Two goods: Airplane and car. A US worker's MPL is 20...
Two countries: US and Mexico. Two goods: Airplane and car. A US worker's MPL is 20 times higher than a Mexican worker in making an airplane. A US worker's MPL is 5 times higher than a Mexican worker in making a car. Which country has absolute advantage in making cars and why? Which country has comparative advantage in making cars and why?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Suppose two countries Mexico and Canada both produce two goods wheat and coffee, suppose the relative...
Suppose two countries Mexico and Canada both produce two goods
wheat and coffee, suppose the relative price of wheat in Mexico is
2.5 but in Canada it is 0.5. If they both specialize based on
comparative advantage and trade, what will be the range of possible
global relative price of coffee that trade will converge to,
providing both countries mutual gains from trade. Assuming the
resource used in producing wheat and coffee is homogeneous, what
will happen to the wheat...
Two large countries, the US and China, produce only two goods, manufactured goods and Financial services,...
Two large countries, the US and China, produce only two goods,
manufactured goods and Financial services, using two factors of
production, skilled and unskilled labour. The production of
Financial services is relatively skill-labour intensive and
manufacturing is unskilledlabour intensive. The US is relatively
well endowed with skilled labour, whereas China is relatively well
endowed with unskilled labour. Assume that each society's
preferences over the two goods are identical.
(a) Draw the production possibilities frontier (PPF) for the US.
Carefully explain...
Two large countries, the US and China, produce only two goods, manufactured goods and financial services,...
Two large countries, the US and China, produce only two goods,
manufactured goods and financial services, using two factors of
production, skilled and unskilled labour. The production of
financial services is relatively skill-labour intensive and
manufacturing is unskilled-labour intensive. The US is relatively
well endowed with skilled labour, whereas China is relatively
well endowed with unskilled labour. Assume that each society‘s
preferences over the two goods are identical.
(a) Draw the production possibilities frontier (PPF) for the US.
Carefully explain...
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...
python 3 countries = ['mexico,'eseft,'ry,',ft,'us'] Write a statement that sorts the countries alphabetically and another statement...
python 3
countries = ['mexico,'eseft,'ry,',ft,'us']
Write a statement that sorts the countries alphabetically and
another statement that prints the last country in the sorted
nations list.
Suppose there are two countries, the U.S. and Mexico. Before immigration, wages are higher in the...
Suppose there are two countries, the U.S. and Mexico. Before
immigration, wages are higher in the U.S. Both countries produce
the manufactured good using labor and capital, and the agricultural
good using labor and land (i.e. labor is mobile, but land and
capital are specific factors). Assume that there is no change in
the prices of the manufactured and agricultural goods, and there is
no international trade in these goods, either. (4 points each, 12
points total)
Hint: you do...
Suppose there are two countries, the U.S. and Mexico. Before immigration, wages are higher in the...
Suppose there are two countries, the U.S. and Mexico. Before
immigration, wages are higher in the U.S. Both countries produce
the manufactured good using labor and capital, and the agricultural
good using labor and land (i.e. labor is mobile, but land and
capital are specific factors). Assume that there is no change in
the prices of the manufactured and agricultural goods, and there is
no international trade in these goods, either. (4 points each, 12
points total)
Hint: you do...
Suppose that Boeing (US company) sold airplane to Lufthansa (German company) on credit and invoiced €20...
Suppose that Boeing (US company) sold airplane to Lufthansa
(German company) on credit and invoiced €20 million payable in six
months. Two companies agree to share the currency risks. In the
Price Adjustment Clause, the neutral zone is $1.14/€ - $1.26/€, the
base rate is $1.2/€; and both parties will share the currency risk
beyond a neutral zone. How much each party have to pay/receive
if:
A) How much each party have to pay/receive if the exchange rate is
$1.08/€...
Suppose that Boeing (US company) sold airplane to Lufthansa (German company) on credit and invoiced €20...
Suppose that Boeing (US company) sold airplane to Lufthansa
(German company) on credit and invoiced €20 million payable in six
months. Two companies agree to share the currency risks. In the
Price Adjustment Clause, the neutral zone is $1.14/€ - $1.26/€, the
base rate is $1.2/€; and both parties will share the currency risk
beyond a neutral zone. How much each party have to pay/receive
if:
How much each party have to pay/receive if the exchange rate is
$1.32/€?
a....
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