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Finance
Let two countries with offer curves y =5x + 10x^2 and y =20x -5x^2
(a) Determine the equilibrium terms of trade.
(b) Determine the autarky terms of trade and show that the equilibrium terms of
trade lie between the two autarky ones.
(a) Determine the equilibrium terms of trade.
(b) Determine the autarky terms of trade and show that the equilibrium terms of
trade lie between the two autarky ones.
Finance
A country produces only commodity 1 and commodity 2 using capital (K) and
Labor (L) as inputs. Assume that the production of commodity 1 uses 10 units of
capital for each worker, so that K1 =10L1 , while the production of commodity 2
uses 2 units of capital for each worker, so that K2 =2L2 . The total supply of
capital is 400 units and the total supply of labor is 100 units.
(a) Determine the amount of both inputs of production, that is, capital and labor,
used in each commodity and the output levels.
(b) Now assume that the number of workers increases to 140 due to immigration,
keeping total capital fixed at 400. Solve for the amount of capital and labor in
used in each commodity and for the output levels. Relate your findings in (a) and
(b) to a theoretical result of the Standard Trade Theory.
Labor (L) as inputs. Assume that the production of commodity 1 uses 10 units of
capital for each worker, so that K1 =10L1 , while the production of commodity 2
uses 2 units of capital for each worker, so that K2 =2L2 . The total supply of
capital is 400 units and the total supply of labor is 100 units.
(a) Determine the amount of both inputs of production, that is, capital and labor,
used in each commodity and the output levels.
(b) Now assume that the number of workers increases to 140 due to immigration,
keeping total capital fixed at 400. Solve for the amount of capital and labor in
used in each commodity and for the output levels. Relate your findings in (a) and
(b) to a theoretical result of the Standard Trade Theory.
Finance
The production function for commodity 1 is q1 = min{K / 2, L / 2} and for commodity 2 is q2 =min{K / 3, L}. The wage rate is w and the rental price of capital in r.
(a) Write the pricing equations for the two commodities under perfect competition.
(b) Assume that 1 p =4 and 2 p =3. Determine the equilibrium w/r when both commodities are produced.
(c) Holding p2 fixed consider an increase in the price of commodity 1 to p1 =5.
Determine the new equilibrium w/r. Relate your findings in (b) and (c) to a theoretical result of the Standard Trade Theory.
(a) Write the pricing equations for the two commodities under perfect competition.
(b) Assume that 1 p =4 and 2 p =3. Determine the equilibrium w/r when both commodities are produced.
(c) Holding p2 fixed consider an increase in the price of commodity 1 to p1 =5.
Determine the new equilibrium w/r. Relate your findings in (b) and (c) to a theoretical result of the Standard Trade Theory.
Finance
Two countries, C and D, produce olive oil and beer. The labor requirements
for the production of one unit of each product in countries C and D are given in
the following table:
(labor hours per unit of output)
Commodity
Country Olive oil beer
C 8 2
D 2 4
Country C has 200 and country D has 1000 unit of labor available.
(a) Which country has an absolute advantage in the production of olive oil and which in the production of beer? Which country has a comparative advantage in the production of olive oil and which in the production of beer?
(b) What are the relative prices in each country in autarky?
(c) The World Relative Demand (RD) for beer is QB /QO =0.4 - 0.2(PB / PG ) .
Determine the world equilibrium under free trade and describe the pattern of
trade.
(d) Determine the relationship between wages in each country under free trade
(assume perfect competition in product and input markets).
for the production of one unit of each product in countries C and D are given in
the following table:
(labor hours per unit of output)
Commodity
Country Olive oil beer
C 8 2
D 2 4
Country C has 200 and country D has 1000 unit of labor available.
(a) Which country has an absolute advantage in the production of olive oil and which in the production of beer? Which country has a comparative advantage in the production of olive oil and which in the production of beer?
(b) What are the relative prices in each country in autarky?
(c) The World Relative Demand (RD) for beer is QB /QO =0.4 - 0.2(PB / PG ) .
Determine the world equilibrium under free trade and describe the pattern of
trade.
(d) Determine the relationship between wages in each country under free trade
(assume perfect competition in product and input markets).
Finance
How does international trade benefits Households?
Finance
Local and international trade has expanded in recent years, posing, both, as a threat and as an opportunity to households and firms, What are the threats and what are the opportunities?
Finance
you know that the water park will increase the traffic flow in the streets around the water park. there both businesses and neighborhoods adjacent to the increased traffic flow. the coast to the community is estimated to be $6 per person. what kind of externality is this? why?
Finance
explain how a production possibility frontier can be use
Finance
On 1 January 2008, bob Jones received a lump sum of R 200 000. He invested the full amount in a fixed deposit paying interest at 7% p.a. compounded monthly. The maturity date of this investment is 31 December 2010. The following annual inflation rates have been predicted for the given calender years: For 2008-8,3%; For 2009-8,5%; For 2010-8,7%. Bob regards the annual inflation rate as his personal required rate of return for that year? Calculate the Net Present Value of this investment?
Finance
local and international trade has expanded in recent years, posing, both, as a threat and as an opportunity to households and firms . carry out research, presnting the opportunities of international trade, and how it benefits households ond firms
