Determined by the laws of supply and demand

Assignment Help Business Economics

Reference no: EM13160544

The United States and Russia each produce only bearskin caps and wheat. Domestic prices are given in the following table:

PRODUCTION	RUSSIA	UNITED STATES	UNIT
Bearskin Cap	10 Ru	$7	Per hat
Wheat	15 Ru	$10	Per quart

On April 1, the Zurich exchange listed an exchange rate of $1=1 Ru

1. Which country has an absolute advantage in the production of bearskin caps? Wheat?

2. Which country has a comparative advantage in the production of bearskin caps? Wheat?

3. If the United States and Russia were the only two countries engage in trade, what adjustments would you predict, assuming exchange rates are freely determined by the laws of supply and demand?

Reference no: EM13160544

Questions Cloud

Standard and modified proctor tests : Describe the difference between the standard and modified Proctor tests. Describe the S = 100% curve (zero air voids) and why it is important to the evaluation of compaction data.

Find the present value for each year if the interest rate : Find the present value for each year if the interest rate is 6% and then add them together for the total present value of future revenue.

State what is the equilibrium constant of the formation : What is the equilibrium constant of the formation reaction of ammonia gas at 298.15 K under the conditions that the partial pressures

Weighted-average contribution margin ratio : Fields Corporation has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Fields incurs $2,220,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Spor..

Determined by the laws of supply and demand : If the United States and Russia were the only two countries engage in trade, what adjustments would you predict, assuming exchange rates are freely determined by the laws of supply and demand?

Executive component of sales and operations planning : What is the executive component of the S&OP (Sales and Operations Planning (S&OP)?) process? make answer as brief as possible.

Explain moles of a gas are placed into a rigid : the pressure is measured as 8.75 atm. Which of these three gases below could be in the container and why? 1) Ar, 2)Co2, 3)HCl

Units of q-chip sold at the break-even point : Q-Chip Plus has variable costs per unit of $35 and a selling price of $65. Konerko's fixed costs are $540,000. How many units of Q-Chip would be sold at the break-even point?

What remedies are available to him : Kristina does not want to pay him $1000 on delivery. Can the baker sue Kristina for payment of the cake? What remedies are available to him?

User Account

All Pages