How does the relative price under free trade change

Assignment Help Microeconomics

Reference no: EM131777071

Question: In the Heckscher-Ohlin model studied in the slides, where C is capital-intensive, Home is labor-abundant, there is no factor substitution, and both countries are incompletely specialized:

(a) Suppose the labor endowment at home increases. Discuss how this will impact the wage relative to the returns to capital at home when both countries are open to trade and when both countries are closed to trade.

(b) Suppose that labor migrates from Foreign to Home. How does the relative price under free trade change?

(c) Suppose that it costs T% of the price of a good to ship it between countries. Is larger, smaller, or the same as Why?

Reference no: EM131777071

Questions Cloud

Policies will decrease unscheduled time off : Do you think changing Superior’s time off policies will decrease unscheduled time off?

Compute estimated cash collections during october : Coyote Loco is a manufacturer of salsa. Compute estimated cash collections during October from credit sales

What step would you take to ensure that community is prepare : Do you believe that your community is prepared for a disaster event? What steps would you take to ensure that your community is prepared?

What is the latest date that lang can file : Several individuals form Lang Corporation on May, 1 2010. What is the latest date that Lang can file Form 2553 requesting S corporations' status

How does the relative price under free trade change : In the Heckscher-Ohlin model studied in the slides, where C is capital-intensive, Home is labor-abundant, there is no factor substitution.

Explain the relevancy of the social issue : Research an advocate individual or organization that promotes a relevant social issue. Identify the organization and explain the relevancy of the social issue

Compute the economic value added : Compute the economic value added (EVA). To do that, first compute NOPAT = $1 million (if you get say $55.4million, enter 55.4, not 55,400,000)

Business models to stay competitive : The Internet may not make companies obsolete, but these companies must change their business models to stay competitive.

Discuss the heckscher-ohlin model : In the Heckscher-Ohlin model studied in the slides, suppose that K/L = K*/L* but preferences (as reflected in the relative demand RD) may be different.

User Account

All Pages