Trade will raise mexican workers marginal product

Assignment Help Business Economics

Reference no: EM13742236

Suppose the U.S. and Mexico both produce 2 goods, tablets and cereal, using 2 inputs, capital (K) and labor (L). The production of tablets is capital-intensive, and that of cereal is labor-intensive. The U.S. is a capital-abundant country, and Mexico is labor-abundant. Consumers in the 2 countries have identical tastes. Use the Heckscher-Ohlin model to determine whether each of the following statements is true or false. Justify you answer fully, with the help of graphs if necessary.

a. “With free trade, the U.S. will export tablets to and import cereal from Mexico.”

b. “After trade, both the tablet and cereal industries in the U.S. will employ less labor relative to capital.”

c. “Trade will raise Mexican workers’ marginal product, which in turn raises their real wage.”

Reference no: EM13742236

Questions Cloud

Kinase catalyze in a signal transduction pathway : Which reaction does a kinase catalyze in a signal transduction pathway and Which of the following does a catalyst change during a chemical reaction

Discuss any required strategies about structural change : Discuss any required strategies about structural/leadership/organizational change that would enhance successful implementation put in mind this Alibaba, China's biggest net retailer, has engaged in a rare public row with one of the country's watc..

When transaction costs are low enough : When transaction costs are low enough, efficient resource allocation will follow regardless of the particular assignment of property rights. When transaction costs are high enough, efficient resource allocation requires assigning property rights to t..

Formulate the linear programming model for problem : Formulate the linear programming model for problem providing the objective function and the constraints and the definition of the variables - How many reams should be ordered at a time?

Trade will raise mexican workers marginal product : Suppose the U.S. and Mexico both produce 2 goods, tablets and cereal, using 2 inputs, capital (K) and labor (L). The production of tablets is capital-intensive, and that of cereal is labor-intensive. The U.S. is a capital-abundant country, and Mexico..

Determine annual budget and develop fiscal plan : You have been hired as an executive director of a small nonprofit organization. Among your many duties are to determine an annual budget and develop a fiscal plan for the organization.

Write a research paper on civil war in american history : I need to have the resources that were use for the research paper on civil war in american history. we can write about anything related to the american history.

Genotype of an individual who is heterozygous for dimples : In humans, the presence or absence of dimples is a trait controlled by a single gene. What is the genotype of an individual who is heterozygous for dimples

Determine the monthly compounding : If you bought a $1,000 face value CD that matured in nine months, and which was advertised as paying 9% annual interest, compounded monthly, how much would you receive when you cashed in your CD at maturity?

User Account

All Pages