Relationship between average costi and prices

Assignment Help Macroeconomics
Reference no: EM1317254

Suppose that Argentina has abundant capital and scarce labour compared with Brazil. Assume also that wheat is capital-intensive in comparison to cloth, and that other Heckscher-Ohlin assumptions of the 2X2X2 model apply (perfect competition, free trade, constant returns to scale, etc.). Using appropriate diagrams show the equilibrium points in each country before trade. Then show that mutually beneficial trade between these two countries is possible. Label the diagrams clearly to indicate the pattern of trade and show the final equilibrium points for consumption, production, imports and exports. Briefly explain in words the sequence of changes that occur as the two economies move from no trade to free trade.

Reference no: EM1317254

Questions Cloud

Effect of before tariff and after tariff on price : Consider the market for fresh produce in Snowland. Fresh produce is produced expensively in hothouses in Snowland.
Reflective journal : Leadership and Transformation An important aspect of a graduate education is the ability to connect theory and practice ...
Concept of probability using poisson : What is the probability that a particular driver had exactly two speeding violations?
Determining correct decision statement for test : Which of given is the correct decision statement for test?
Relationship between average costi and prices : Briefly explain in words the sequence of changes that occur as the two economies move from no trade to free trade.
Probability values based on contingency table : What is the probability of selecting a female or an accounting major? Which rule of addition did you apply?
Computing the value of sample test statistic : Find out the suitable critical value(s) for this situation given a 0.05 significance level. Find out/compute the value of sample test statistic.
Essay on analysis of us multinational company revenue : Select a U.S. multinational company. In terms of currency denomination, discuss how the firm prices its revenues and costs.
Following of the normal distribution : The number of passengers on the Carnival Sensation during one-week cruises in the Caribbean follows the normal distribution.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Correlation between savings and capital formation

Write down the relationship between savings, capital formation, and consumption.

  Decision making on profit maximization by marginal analysis

Suppose the marginal expense of hiring another worker is $150 and the marginal expense of hiring current workers for an extra hour is $10.

  Production decisions of company

A company produces two main products: electronic control device3s and specialty microchips. The average total cost of producing a microchip is $300; the firm sells the chips to other high-tech manufacturers for $550. Should the company produce con..

  Analyzing factor endowment of country

Assuming that there are only two goods, and the other good (food) is capital intensive, show the equilibrium points of production and consumption in ALFA, before and after trade.

  Equilibrium price and quantity with tax effect

Suppose you're an economic advisor in charge of trying to raise a maximum level of tax revenue for the government. You consider taxing the suppliers in the market for corn, a major agricultural product in the United States.

  Ricardian model application

In light of Ricardian model, how might you measure the claim by developing countries that they're at a disadvantage in trade

  Inflation rate and growth rate of real and nominal gdp

Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. Draw the new short-run Phillips Curve.

  Number of firms in monopolistically competitive industry

All firms in a Cournot monopolistically competitive industry have the same cost function C (q)= 25 + 10q. Compute the equilibrium price, total output, firm output and number of firms in the industry.

  Marginal product and average product-curves relationship

Explain why marginal product first rises, then declines, and ultimately becomes negative. What bearing does the law of diminishing returns have on short-run costs? Be specific.

  Different situations according solow growth model

Assume that the economy starts in steady state. According to the Solow growth model, how would each of the following affect consumption per worker in the long run, Explain?

  Calculation of real wage rate given labor demand and supply

Assume that the nominal wage rate equals 60.  In the short-run, aggregate demand and aggregate supply are equal at a price level of 1.0.

  Analysis of short run and long run price

You are a manager in a perfectly competitive market. The price in your market is $35. Your total cost curve is.

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!

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