Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. In a two country, two good Ricardian model the size of the labour force and the unit labour requirements are provided in the following

image text in transcribed
image text in transcribed
1. In a two country, two good Ricardian model the size of the labour force and the unit labour requirements are provided in the following table: Home Foreign labour L = 1200 L\" = 80C} aa=a Bananas aaa=2 {Note this is the same as the Ricardian example covered in lecture). (a) With no information about the relative demand for goods what is known about the relative demand for labour, $13" as a function of $1? [Shape of RDL, any specic values along the vertical or horizontal axis]. (b) 1What is the range of i\"; when there is free trade? {This is likely something that was answered in ((1)). (c) For an arbitrary % falling in the range from ([1), determine the relative prices of goods with free trade, $11. 3 (d) If the Relative Demand for Apples is ED = 3 % gg, determine the relative demand for Apples as a function of the relative wage, E (6) Use the information in the preceding parts of the question to express the relative LD demand for labour, FF as a function of the relative wage, . (f) Graph RDL showing all values along the horizontal and vertical where the slope of the graph changes. (g) Determine the equilibrium relative wage when there is free trade

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Economics

Authors: Thomas Pugel

16th Edition

0078021774, 9780078021770

More Books

Students also viewed these Economics questions

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago