Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 The short-run effects of the 2021 Haiti earthquake On 21 August 2021, the Caribbean island country Haiti was hit by a 7.2 magnitude earth-

image text in transcribed
image text in transcribed
2 The short-run effects of the 2021 Haiti earthquake On 21 August 2021, the Caribbean island country Haiti was hit by a 7.2 magnitude earth- quake. The earthquake destroyed houses and factories in the country, effectively reducing the amount of capital in the economy. For this exercise, we will assume that Haiti's econ- omy consists of two sectors, the manufacturing sector which uses labor and capital, and the tourism sector, which uses labor and land. As we focus on the short-run effects, we will use the specic factors model, i.e., capital can only be used in the manufacturing sector, and land can only be used in the tourism sector. Workers can move between the two sectors. What is the short-run impact of the reduction in Haiti's capital stock on the wages paid to workers in the economy? What is the impact on the output of the manufacturing and the tourism sector? Illustrate using suitable graphs

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

Microeconomics

Authors: Christopher T.S. Ragan

16th Canadian Edition

0134835832, 978-0134835839

More Books

Students also viewed these Economics questions

Question

Solve equation on the interval 0 2. sin + cos = 2

Answered: 1 week ago

Question

if the PV of $580 is $220, what is the discount factor?

Answered: 1 week ago

Question

3. What is my goal?

Answered: 1 week ago

Question

2. I try to be as logical as possible

Answered: 1 week ago