Assume China has 10,000 workers. Suppose that each Chinese worker produces either 30 pairs of boots or 10 software per month. Suppose that half of Chinese workers produce boots and half produce programs. What quantities of boots and software does China produce? Are these production combinations efficient?
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Assume China has 10,000 workers. Suppose that each Chinese worker produces either 30 pairs of boots or 10 software per month. Suppose that half of Chinese workers produce boots and half produce programs. What quantities of boots and software does China produce? Are these production combinations efficient?
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- Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce. Why shouldn't the nation produce 1 gun and 2 butters?We have two individuals, A and B, who works 40 hours per week each. They each consume food and clothing. It takes each person 10 hours to set up the production of food, and thereafter it takes 1 hour per production of 1 unit of food. How many units of food can each person produce in 1 week?Consider two competitive economies that have the same quantities of labor and capital (K=L), and the same technology. The economies of the countries are described by the following Cobb–Douglas production functions: North Economy: Y = AK^0.7 L^0.3 South Economy: Y = AK^0.3 L^0.7 If half of workers (L) in North immigrated to South, explain how would total output, marginal produc- tivity of labor, and labor’s share of income in the two economies change?
- "Accoring to Ricardo's analysis, a country exports any good whose production requires fewer labor hours per unit than the labor hours per unit needed to produce the good in the foreign country. That is, the country exports any good in which its labor producivity is higher than the labor productivity for this good in the foreign country." Do you agree or disagree? why?Suppose there exist two imaginary countries, Yosemite and Congaree. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Country Pistachios Chinos (Pounds per hour of labor) (Pairs per hour of labor) Yosemite 6 12 Congaree 4 16 Suppose that initially Yosemite uses 1 million hours of labor per day to produce pistachios and 3 million hours per day to produce chinos, while Congaree uses 3 million hours of labor per day to produce pistachios and 1 million hours per day to produce chinos. As a result, Yosemite produces 6 million pounds of pistachios and 36 million pairs of chinos, and Congaree produces 12 million pounds of pistachios and 16 million pairs of chinos. Assume there are no other countries willing to engage in trade, so, in the absence of trade…Suppose there exist two imaginary countries, Congaree and Yosemite. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor.
- Suppose there exist two imaginary countries, Sequoia and Denall. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor. Almonds Country (Pounds per hour of labor) Sequoia Denall Suppose that initially Denall uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Sequola produces 12 million pounds of almonds and 16 million pairs of shorts, and Denall produces 6 million pounds of almonds and 36 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds and shorts it produces.…Consider two competitive economies that have the same quantities of labor and capital (K=L), and the same technology. The economies of the countries are described by the following Cobb–Douglas production func- tions: North Economy: Y = AK^0.7 L^0.3 South Economy: Y = AK^0.3 L^0.7 Compare the total production in these two countries and explain your answer. In which economy is the marginal product of labor larger? Explain your answer. In which economy is the labor’s share of income higher? Explain your answer. If half of workers (L) in North immigrated to South, explain how would total output, marginal produc- tivity of labor, and labor’s share of income in the two economies change?Assuming that there are only two countries in the world, Indonesia and ROW (Rest of the World) which both produce Cloth (C) and Food (F) using labor as factor production. The following table shows the number of hours of work needed to produce one unit of C and F in both countries: Cloth (C) Food (F) Indonesia 1 hour per meter 2 hour per kg ROW 6 hour per meter 3 hour per kg
- Consider two neighboring island countries called Contente and Dolorium. They each have 4 million labor hours available per week that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.If a country can produce more of a good than other countries with a given amount of resources, we say that country has the| [ Select ] and if a country has less to lose in producing a good than other countries do, we say that country has [ Select ]Assuming that there are only two countries in the world, Indonesia and ROW (Rest of the World) which both produce Cloth (C) and Food (F) using labor as factor production. The following table shows the number of hours of work needed to produce one unit of C and F in both countries: Cloth (C) Food (F) Indonesia 1 hour per meter 2 hour per kg ROW 6 hour per meter 3 hour per kg Please answer the followings: a. If we use the Smithian Absolute advantage, can both countries gain? Why? b. Eventually, these countries can still trade, please explain c. Please show the gains from trade for producers and consumers in both countries d. Can we see a catching up (factor price) pattern for both countries?