Y6

Assume that there just two countries in the world: FRANCE and ROMAN IA. Both countries can produce and consume six different types of good: wheat, corn, barley, rye, hop, and oat. The productivity of the labor force is given in each sector for both countries. FRANCE needs 1.5 hours to produce 1 kg of wheat, while ROMANIA requires 9 hours for that. The unit labor requirements of both corn and barley production in FRANCE are 1 hour and 1.25 hours respectively. In the meantime, in ROMANIA it takes 4 and 2.5 hours to produce one unit of corn and barley respectively. Rye and hop grow quickly in both countries, FRANCE needs [1.3 and 1.25 hour, while ROMANIA needs 0.9 and 1.25 hours to produce them respectively. One can observe the biggest technological difference between the countries in the production of oat: FRANCE requires to use [15 unit of labor, while ROMANIA requires to use 4 units of labor to produce one unit of oat.\" o. Illustrate the relative labor demand curve.\" I). Let us allow international trade between the countries. Where will each good be produced and exported if we know that the wage rate per hour in FRANCE is $12.5, while that in ROMANIA is just 55?\" r I c. How do production and trade change if the wage rate in FRANCE is $31.5, while that in ROMANIA is 54.5?" d. How do production and trade change if the wage rate in FRANCE is $29.25, while that in ROMANIA is $5.95?" e. Let us introduce transport costs. Evaluate the patterns oftrade with the different wage levels of questions b, c and d if the value of transport costs is 513%.\