Question
In: Economics
Consider two countries: Home and Foreign. There is one high-tech firm in each country, and each...
Consider two countries: Home and Foreign. There is one high-tech firm in each country, and each firm produces high-speed trains for both domestic consumption and exporting. The high-tech firms in both countries have been operating businesses for decades without subsidy. However, they plan to produce a new model of high-speed train, and this new model requires a large amount of fixed cost, which is equivalent to 20 times of marginal cost. Each firm has asked its government to provide subsidy, which is amount to half of the fixed cost. Do you think the government should provide subsidy? Explain your reasoning.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
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...
There are two countries, Home and Foreign, each producing only one good by using labor and...
There are two countries, Home and Foreign, each producing only
one good by using labor and capital. The supply and the quality of
labor as well as the technology of production are identical in both
countries and labor mobility between the countries is not allowed.
The marginal productivity of the 1st unit of capital used is 20
whereas the marginal productivity of the 9th unit is 12 and there
is a linear relation between the marginal product of capital and...
There are 2 countries, Home and Foreign, and 2 goods, Wine and Cheese. In each country...
There are 2 countries, Home and Foreign, and 2 goods, Wine and
Cheese. In each country
the are 150 workers. But not all workers are the same: some workers
are cheese-makers and some
workers are wine-makers. Each cheese-maker can produce one pound of
cheese and zero bottles of
wine, and each wine-maker can produce one bottle of wine and zero
pounds of cheese. In the Home
country there are 100 cheese-makers and 50 wine-makers, and in the
Foreign country there...
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...
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
be 25.
What...
Imagine two countries are trading pomegranates. The Home country is “large” and imports pomegranates. The Foreign...
Imagine two countries are trading pomegranates. The Home country
is “large” and imports pomegranates. The Foreign country exports
pomegranates (the size of Foreign is not important for this
question). What would happen to the equilibrium world price of
pomegranates if demand for pomegranates in the Foreign country's
market increases?
a.The equilibrium world price will increase
b.The equilibrium world price will decrease
c.The equilibrium world price will not change
part2
Imagine two countries are trading flower pots. The Home country
is...
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?
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