Application of heckscher, Which country is capital abundant

Application of heckscher

Assignment Help Macroeconomics

Reference no: EM1313290

Application of Heckscher - Ohlin theorem.

There is a world with two countries, Canada and India. They produce robots and rugs using capital and labor. Robots are capital intensive and rugs are labor intensive. It is unknown what the supplies of capital and labor are in each country, but it is known that the relative price of robots is higher in India than in Canada in the no-trade equilibria.

a. Which country is capital abundant according to the Heckscher-Ohlin theorem?

b. Given your answer to (a), draw the PPF for Canada. Also draw the indifference curve and the relative price line for the no-trade equilibrium.

c. Given your answer to (a), draw the PPF for India. Also draw the indifference curve and the relative price line for the no-trade equilibrium.

d. Compare the slopes of the relative price lines for Canada and India that you draw in (c) and (d). What does this comparison tell you about the pattern of trade?

Reference no: EM1313290

Questions Cloud

What is the friction force that acts on the bear : A small, 300 g cart is moving at 1.60 m/s on an air track when it collides with a larger, 1.00 kg cart at rest. After the collision, the small cart recoils at 0.890 m/s.

Finding mean-variance by creating probability distribution : Use frequency distribution to create a probability distribution, determine the (b) mean,(c) variance and (d) standard deviation of probability distribution and (e) interpret results in context of real life situation.

Difference in the mean number : At the .05 significance level, is there a difference in the mean number of calls per day between the two employees?

Should country record on the bond retirement : Computation of loss and gain on retirement of bonds - Country reacquired all of these bonds at 96 on June 30, 2007, and retired them. Ignoring income taxes, how much gain/loss should country record on the bond retirement?

Application of heckscher : Which country is capital abundant according to the Heckscher-Ohlin theorem? Given your answer to (a), draw the PPF for Canada. Also draw the indifference curve and the relative price line for the no-trade equilibrium.

When the economy is at the point of full employment : When the Economy is at the point of Full Employment, is the Unemployment Rate zero percent.

Explain the term capital budgeting : Explain the term Capital budgeting in concern to Ettenheim Village is considering building a town swimming pool

How much thermal energy is created : A person who weighs 68 kg steps onto a spring scale in the bathroom, and spring compresses by 0.79cm. (a) what is the spring constant? (b) What is the weight of another person who compresses the spring by 0.34cm.

Determining risk of developing type 2 diabetes : Describe the most suitable measure of incidence of diabetes in this scenario? Find the risk (ie measure of Incidence identified in part c) of developing type 2 diabetes among females in this community.

User Account

All Pages