Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with the below question, Question 1 - Ricardian World (30 percent) Suppose that there are two countries, Home and Away, each endowed

image text in transcribed

Please help me with the below question,

image text in transcribed
Question 1 - Ricardian World (30 percent) Suppose that there are two countries, Home and Away, each endowed with one factor of production, labour (4). The citizens of each country consume two goods - fish (F) and salt (5). Labour Available Unit Labour Requirements (millions of Hours per pound of Hours per pound of salt hours) Fish Home 90 0.75 2.00 Away 150 1.50 3.00 a. Assign the absolute and comparative advantages for the production of each good. (10 percent b. What would be the relative price of fish to salt In the Home country under suterky? What would be the relative price of fish to salt In the Away country under autarky? (4 percent) C. Graph the world relative supply curve for fish. (8 percent] d. Suppose that trade results In a relative price of fish at 0.4 pounds of salt per pound of fish. Are both countries better off with International trade? Explain. (8 percent)

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_2

Step: 3

blur-text-image_3

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

Macroeconomics

Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone

8th Canadian Edition

134646355, 9780134842615 , 978-0134646350

More Books

Students also viewed these Economics questions

Question

Why do employees prefer employee benefits to straight wage income?

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago

Question

The quality of the proposed ideas

Answered: 1 week ago