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How many workers will be employed in the brazil car

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Reference no: EM133252224

You are in a Heckscher-Ohlin world. That is, all assumptions of the Heckscher-Ohlin (or factor-proportions) model hold. There are two goods in the world: cars and shrimp.

There are two factors in the world: labor and machines. There are only two countries in the world: Brazil and Thailand.

In order to harvest 100 ct of shrimp a firm needs one person (Ls= 1) and one machine (Ms= 1).

That is, Ls=Ms

In order to make a car a firm needs one person (Ls= 1) and 4 machines (Mc=4). That is, Mc = 4Lc

Brazil has a total workforce of L=2000 and machine stock of M=5000.

Thailand has a total workforce of L=3200 and machine stock of M=5000.

Now suppose that 600 workers migrate from Thailand to Brazil. (Assume no international trade is occurring).

a. How many workers will be employed in the Brazil car industry and how many will be employed in the Brazil shrimp industry?

b. How many machines will be employed in the Brazil car industry and how many will be employed in the Brazil shrimp industry?

C. How many workers will be employed in the Thai car industry and how many will be employed in the Thai shrimp industry?

d. How many machines will be employed in the Thai car industry and how many will be employed in the Thai shrimp industry?

e. How many total workers will be employed in the global car industry? (That is, Brazil and Thailand combined.)

f. How many total workers will be employed in the global shrimp industry? (That is, Brazil and Thailand combined.)

g. How many total machines will be employed in the global car industry? (That is, Brazil and Thailand combined.)

h. How many total machines will be employed in the global shrimp industry? (That is, Brazil and Thailand combined.)

i. How has migration affected world production of cars and shrimp?

j. How has migration of labor affected international trade in goods?

k. How has migration affected the price of shrimp and the price of cars?

l. How has migration affected the wages paid to labor and the price of machines?

Reference no: EM133252224

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