User Account

All Pages

Find the relative price of fish in countries

Assignment Help Business Management
Reference no: EM131204050

Consider the following model of trade between Iceland and Finland. There are two goods: Fish and Wheat. The only factor of production is labor. Each Icelandic worker can produce 1 unit of fish or 1 unit of wheat per unit of time, while each Finnish worker can produce 2 units of fish or 4 units of wheat per unit of time. There are 3 million workers in Iceland and 1 million in Finland. The relative demand in each country is given by

RD: . Note that since both countries have the same relative demand, this is also

the world's relative demand.

a. Which country has an absolute advantage in fish? In wheat? Which country has a comparative advantage in fish? In wheat?

b. Find the relative price of fish in both countries when there is no trade (each country is isolated). Express the relative price as the price of fish divided by the price of wheat. Draw the typical worker's budget line in both countries.

c. Graph the relative demand in a diagram with the relative price of fish (PF/PM) on the vertical axis and the relative quantity of fish (QF/QM) on the horizontal axis.

d. Derive the world relative supply curve and draw it on the same figure as you created for part c.

e. Compute the equilibrium relative price of fish under free trade, and draw the budget lines for a typical worker in each country. Which country produces which good(s)? Is there complete specialization? Who gains from trade?

f. What happens (conceptually) if the population of Iceland falls?

Reference no: EM131204050

Questions Cloud

What is the major advantage of using the technique : What is the major advantage of using the technique of avoidance in a risk management program? Is it possible or practical for a firm to avoid all potential losses? Explain your answer.
Using substitution theorem draw three equivalent branches : Using the substitution theorem, draw three equivalent branches for the branch a-b of the network of given figure b.
What is the maximum property tax levy that would be allowed : What was the property tax levy in 2015? What is the maximum property tax levy that would be allowed in 2016? What is the market value of taxable property in 2016?
Develop an intervention plan : Discuss which population is most affected by this Topic Area and why - Describe what impact this Topic Area has on the health of individuals.
Find the relative price of fish in countries : Find the relative price of fish in both countries when there is no trade (each country is isolated). Express the relative price as the price of fish divided by the price of wheat. Draw the typical worker's budget line in both countries.
Number of students in the fall term : Nearby College has done a study of college enrollments and has concluded that the number of students in the fall term is given by
Discuss possible explanations for this finding : These parameters are the same for all participants. It is found that the amount of income not declared is, on average, different among the countries. Discuss possible explanations for this finding.
Develop an intervention plan : Discuss which population is most affected by this Topic Area and why - Describe what impact this Topic Area has on the health of individuals.
Show how multiple equilibria can occur : Show how multiple equilibria can occur. Which equilibria are stable?

Reviews

Write a Review

Business Management Questions & Answers

  Positive and negative side of strategy

Garner your opinion on whether the Avon grand strategy under the leadership of Andrea Jung has its merits. Provide feedback with regard to both the positive and negative side of Jung's grand strategy to improve Avon.

  Explain organizational stress prevention

Identify at least one organizational stress management method aligned with each type of prevention

  Recruiting and staffing

Jean Phillips and Stanley Gully illustrate unfair discrimination occurs when employment decisions are based on factors such as race, sex, religion, ethnicity, or a person's disabilities.

  Corporations need a board of directors

1.Why do corporations need a board of directors?

  How the role of an effective follower is similar

Explain why do you think so little attention is given to followership compared to leadership in organizations? Explain how the role of an effective follower is similar to the role of a leader.

  Database essentialsfrom first normal form second normal

database essentialsfrom first normal form second normal form or third normal form select one of these forms and

  Prepare a project report about ali baba

Prepare a project report about Ali Baba.

  Identify the outcome of the change in terms of success

Identify the outcome of the change in terms of success, failures, cultural outcomes, and human resource changes. You should support your ideas with at least three references. Your paper should be 3-5 pages long, well-written.

  Explain how both negative and positive consumer attitudes

Explain how both negative and positive consumer attitudes toward a brand like Pink develop? Explain how may someone's attitudes toward Pink change?

  Changes in maximize a teams performance

As described in the article, how would one implement such ideas into an organization and/or implement the changes in a team in order to maximize a teams performance? Thoughts?

  Differential costs and decision making for st. mary mills

Differential Costs and Decision Making for St. Mary Mills - St. Mary Mills, Inc. (SMM) uses high-quality looms to manufacture its textile products.

  Analyzing the presentation environment

Can a presenter really change his or her picture from presentation to presentation? If so, how? Try to consider of an example in which this might happen or has happened.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd