Note: Same information for questions 5-19, except where noted. The world is composed of two countries, Country A and Country B. They use labor to produce two goods, Coats and Umbrellas. All of the assumptions of the Ricardian Model hold. The following table shows the unit labor inputs to make each good in each country. One unit of labor is one hour of labor. Country A has 6000 units of labor and country B has 10000 units of labor. The two countries are engaged in free and costless trade and both countries gain with trade, except as noted. Country A Country B Coats 1 3 Umbrellas 4 24 Use the following information to answer questions 14-15 only. Assume that country B has comparative advantage in Coats only and absolute advantage in Umbrellas only. Also suppose that the countries fully specialize in the production of one good, and that the world price of umbrellas is PU=120. (Note: Having separate information is to your advantage, as it decouples the answer here from other answers that you may have gotten wrong. However, don’t use this information to answer any other questions, as the information here is not necessarily correct for other questions!) Enter the wage in Country B, or enter 0 if there is not enough information to answer the question.
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Note: Same information for questions 5-19, except where note…
Note: Same information for questions 5-19, except where noted. The world is composed of two countries, Country A and Country B. They use labor to produce two goods, Coats and Umbrellas. All of the assumptions of the Ricardian Model hold. The following table shows the unit labor inputs to make each good in each country. One unit of labor is one hour of labor. Country A has 6000 units of labor and country B has 10000 units of labor. The two countries are engaged in free and costless trade and both countries gain with trade, except as noted. Country A Country B Coats 1 3 Umbrellas 4 24 The following graph represents the Production Possibilities Frontier of Country A. It is not necessarily drawn in scale, it is for illustration only. Don’t use its scale to answer any questions. Use it as an illustration to answer questions 12-13 only. (Note: Having separate information is to your advantage, as it decouples the answer here from other answers that you may have gotten wrong. However, don’t use this information to answer any other questions, as the information here is not necessarily correct for other questions!) Enter the number X in figure above, or enter 0 if not enough information is provided.
Note: Same information for questions 20-25. The world is mad…
Note: Same information for questions 20-25. The world is made of two countries. Home has 8000 workers and Foreign has 2000 workers. One unit of labor is one worker working for a week. The following figure represents the marginal product of labor of the home country (MPL, measured from the left) and the marginal product of labor of the foreign country (MP*L, measured from the right). Note: it’s really important that you get the initial situation (before there is any migration) correctly. If you get it wrong all of your answers are likely to be wrong. Now migration becomes free between the two countries. Use this to answer questions 22-25. How many workers will emigrate from one country to another? Enter a whole number.
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