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I need this question answered for my study guide, have a test tomorrow and really needed help with these questions asap so I can study them, thank you. image text in transcribed
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The US and Colombia can produce two goods, automobiles and cut flowers. The unit labor requirements in automobiles and flower production are given by the following table: Cut Flowers Automobiles US 1 10 Colombia S 100 Suppose that the U.S. has 15000 units of labor available while Colombia is with a labor force of 500. a. (12 points) Calculate the opportunity cost of automobiles in terms of flowers. Which country has an absolute advantage in automobile production, which in production of flowers? Which country has a comparative advantage in automobile production, which in production of flowers? c. (10 points) Suppose now that both countries open up to free trade. Graph the relative world supply of automobiles to flowers and its response to the relative world price of automobiles P./P, based on the unit labor requirements. Provide specific values on the axes. Show your work Paragraph BIER Path:p d. (15 points) Suppose the world relative demand for automobiles takes the following form: (P/P)= 42 - 2 x (Q/Q4) where Q./Q is the world relative quantity demanded of automobiles, and PG/P: is the world relative price of automobiles. Graph the relative demand curve Find the relative world price of automobiles in equilibrium How many units will each country produce from each good in trade equilibrium? Find the equilibrium relative wage w/w* under free trade The US and Colombia can produce two goods, automobiles and cut flowers. The unit labor requirements in automobiles and flower production are given by the following table: Cut Flowers Automobiles US 1 10 Colombia S 100 Suppose that the U.S. has 15000 units of labor available while Colombia is with a labor force of 500. a. (12 points) Calculate the opportunity cost of automobiles in terms of flowers. Which country has an absolute advantage in automobile production, which in production of flowers? Which country has a comparative advantage in automobile production, which in production of flowers? c. (10 points) Suppose now that both countries open up to free trade. Graph the relative world supply of automobiles to flowers and its response to the relative world price of automobiles P./P, based on the unit labor requirements. Provide specific values on the axes. Show your work Paragraph BIER Path:p d. (15 points) Suppose the world relative demand for automobiles takes the following form: (P/P)= 42 - 2 x (Q/Q4) where Q./Q is the world relative quantity demanded of automobiles, and PG/P: is the world relative price of automobiles. Graph the relative demand curve Find the relative world price of automobiles in equilibrium How many units will each country produce from each good in trade equilibrium? Find the equilibrium relative wage w/w* under free trade

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