EBK INTERNATIONAL ECONOMICS
7th Edition
ISBN: 9780134523873
Author: Gerber
Publisher: YUZU
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Chapter 4, Problem 4SQ
To determine
Explain what returns happens to the labor and capital after the trade begins.
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Students have asked these similar questions
What is meant by production and consumption being pro-trade, antitrade, or neutral? What are the terms of trade effect and wealth effect of growth? explain in detail
The total gains from specialization and trade are ________.
When a nation concentrates on a certain production activity based on a specific resource, which of the following terms best describes the situation?
an advantage of labor
a comparative advantage
specialization
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EBK INTERNATIONAL ECONOMICS
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- The principle of comparative advantage helps explain trade between nations. True Falsearrow_forwardCountries A and B have two factors of production, capital and labor, with which they produce two goods, X and Y. Technology is the same in the two countries. X is capital-intensive; A is capital-abundant. Analyze the effects on the terms of trade and the welfare of the two countries of the following: A's welfare Event a. An increase in A's capital stock. Terms of trade effect B's welfarearrow_forwardThe theories of absolute and comparative advantage have been offered as an economic rationale for trade between and among regions and countries. Compare and contrast the two concepts. Which of the two do you think is more important for explaining the growth in global trade during the last 25 years? Why” The size of a country’s population and the associated age distribution can be causal factors for economic growth. Why is the size of the population important to economic development? Can size be a disadvantage? Why is age distribution important?arrow_forward
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- If a country closes off to trade and notices that the number of firms in an industry doubles in size, what economic theory would help us explain this phenomenon? A. Stolper-Samuelson. B. Melitz. C. Ricardian. D. Cournot. Explain your answer in up to 200 words and using a diagramarrow_forwardSaudi Arabia has huge oil reserves, but relies on the United States for oil rigs to extract the oil. Which of the following terms best describes the relationship between the two nations? free trade O interdependence dependencearrow_forwardAssume that Germany has 1200 units of labor available and it can produce two goods: apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. France has a labor force of 800. France’s unit labor requirement in apple production is 5, while in banana production it is 1. How many total units of apples and bananas will be produced in the world after trade?arrow_forward
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