textles (which are i ensive in pory and its (which are intensive in capital) both increase. According to the Heckscher-Ohlin theory, China is abundant in Consistent with the Heckscher-Ohin theory and the Stolper-Samuelson theorem, which of the following groups in China will support its free trade agreement with Japan? Check all that apply. Workers in car production Capital owners in car production Workers in textile production Consumers

textles (which are i ensive in pory and its (which are intensive in capital) both increase. According to the Heckscher-Ohlin theory, China is abundant in Consistent with the Heckscher-Ohin theory and the Stolper-Samuelson theorem, which of the following groups in China will support its free trade agreement with Japan? Check all that apply. Workers in car production Capital owners in car production Workers in textile production Consumers

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 35P: If trade increases world GDP by 1 per year, what is the global impact of this increase over 10...

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Similar questions

Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Explain why such a statement is economically impossible.
If trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.
Consider the two countries of Syria and UAE. A business man wants to do trade between the two countries. If Syria produces maximum of 2 million kilograms of tomato and maximum of 4000 kilograms of Halwa, then draw the production possibility frontier What is the absolute value of the slope of this production possibility frontier? In the 2-factor, 2-good Heckscher-Ohlin model, why the two countries are different? What will happen when Syria's currency depreciates? What type of contract is he involved if he negotiates over the exchange rate for 30 days in future?
Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume the 2 states—Futland and Tandam share a common currency (allowing us to ignore exchange rate), they both have the same wages, and they both produce two goods: bicycles and boots. The units of labour requirement are shown below, assuming constant returns to scale. Production Techniques: Units of labour hour required per unit output Tandom Futland Bicycles 90 hours 120 hours Boots 30 hours 50 hours iii. Which country has a comparative advantage in the production of each of the two goods?
Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume the 2 states—Futland and Tandam share a common currency (allowing us to ignore exchange rate), they both have the same wages, and they both produce two goods: bicycles and boots. The units of labour requirement are shown below, assuming constant returns to scale. Production Techniques: Units of labour hour required per unit output Tandom Futland Bicycles 90 hours 120 hours Boots 30 hours 50 hours i. Briefly explain absolute advantage theory by Adam Smith and comparative advantage theory by David Ricardo. Which country has an absolute advantage in the production of each good?
Suppose that Egypt produces cotton and lamb, and that it has comparative advantage in cotton. Draw Eqypt's non-linear (i.e., concave) PPF and FTBL, with cotton on the horizontal axis and lamb on the vertical axis. Be sure to label the axes, the PPF, the FTBL and the autarky and free trade prices. Also show the quantities of imports and exports. (Note, there are no values for the prices, so just show the price ratio and how it's represented in the graph.)
Take into account an H-O economy where there are two factors (US and France), two items (wine and cheese), and two countries (US and France) (capital and labor). You are required to make assumptions about other parts of the model in each of the questions that follow. Consider each query individually and separately. a. Assume cheese production is labor-intensive and labor-abundant in the US. What kind of trade patterns exist in free trade? (List the imports and exports that the US and France make.) Which theorem is used to arrive to this conclusion? Explain. b. Assume that a rise in the US labor force leads to an increase in cheese production. Which aspect is heavily utilized in the making of wine? Which H-O theorem is used to arrive to this conclusion? Explain. c. Assume that a drop in cheese prices results in a decline in the wage rate in the US economy. Which element is heavily utilized in the French cheese industry? This solution is derived from which H-O theorem? Explain. d. Assume…
Consider two countries, the U.S. and Bangladesh, trading two goods, shoes and food. There are two factors of production, labor and capital. Assume that the production of shoes is relatively more capital intensive than the production of food in the U.S. Instead, the production of shoes is relatively more labor intensive in Bangladesh than the production of food. Assume that the U.S. is the capital abundant country and that Bangladesh is labor abundant. Both goods are produced by both countries in equilibrium. Illustrate the initial factor prices and factor intensities in a carefully drawn and labeled diagram with capital on the y-axis and labor on the x-axis, and indicate the cone(s) of diversification. Assume that the world price of shoes declines, but that both countries' continue to produce both goods. Illustrate the effect of this change in either the same or a new diagram. How do the real returns to both factors change in the two countries? Explain whether your findings are…
In the Heckscher-Ohlin-Vanek model with trade a country that is labour abundant will export the good that is labour intensive. export the good that is capital intensive. have positive trade balance have positive labour content of trade.
Consider the Heckscher-Ohlin model of international trade. There are two goods, shoes and computers, produced with labour and capital. The production process features diminishing returns to each factor of production. The production of shoes is labour-intensive and the production of computers is capital-intensive. There are two countries, the UK and India. Denote the labour force and the capital stock of the UK and India by LUK and KUK, and LIN and KIN , respectively. The UK is capital-abundant and India is labour abundant. Describe India’s factor markets: on a graph with the labour-capital ratio (L/K) on the horizontal axis and the wage-rental ratio (W/R) on the vertical axis, depict India’s no-trade economy-wide relative demand (RD) and relative supply (RS) of labour-to-capital. Show the no-trade equilibrium wage-rental ratio.
The following is a table of two countries showing labor cost to produce Good A to Good J; A B C D E F G H I J Country I 100 100 100 100 100 100 100 100 100 100 Country II 288 180 160 140 120 100 80 60 40 20 Assuming labor as the only cost and exchange rate is 1:1 ================ The goods that Country I will export Select one: a. diminishes in number and in volume/value b. diminishes in number but not necessarily in volume/value c. will make the country worse off immediately d. none of the above
A country (Latifundia) produces an agricultural commodity (A) and a manufactured product titanium (T). Latifundia can be described as an increasing costs producer. Before trade, Latifundia produces at a point P, where the internal exchange ratio is: 1 T = 1 A. Show diagrammatically, and explain thoroughly, what happens if Latifundia cam trade at 1 T = 2A . Specify all relevant points and ideas clearly. Given the above, reflect also on appropriate trade policy responses by the decision makers in the said country.