Identify their corresponding production-consumption points

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Reference no: EM131001859

International economics

j-Display diagrammatically two countries A and B.

Identify their corresponding production and consumption points.

Use Labor along the horizontal axis and Capital along the vertical axis.

Can you identify the country having a comparative advantage?

Can you calculate the price of labor and the price of capital?

k-Use a PPF structured as a straight line.

Assume that the country has two factors of production…L and K.

The payments to the factors are:

w = wages (labor)

r = rent (capital)

Calculate:

a. The total cost of production.

b. The value of the slope.

Reference no: EM131001859

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