Illustrate the gains from trade between the two countries

Reference no: EM131135059

Assume that Norway and Sweden trade with each other, with Norway exporting fish to Sweden, and Sweden exporting Volvos (automobiles) to Norway. Illustrate the gains from trade between the two countries using the standard trade model, assuming first that tastes for the goods are the same in both countries, but that the production possibility frontiers differ: Norway has a long coast that borders on the north Atlantic, making it relatively more productive in fishing. Sweden has a greater endowment of capital, making it relatively more productive in automobiles.

Reference no: EM131135059

Questions Cloud

What happens to the rentals on capital and land : In the short-run specific-factors model, consider a decrease in the stock of land. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops.

What does mendel postulate of segregation state : What does Mendel's postulate of segregation state? What does Mendel's postulate of independent assortment state

How the theoretical frameworks shared in your venn diagram : Explain how the theoretical frameworks shared in your Venn diagram support cognitive development. Make sure to include at least one example to support your reasoning. Discuss which of the theoretical perspectives resonates with you the most, the le..

How is earth unique as compared to other planets : How is Earth unique as compared to other planets in our solar system? How is it similar? And finally, what geologic information might we obtain by visiting Mars or Venus that would be similar to what we see on Earth?

Illustrate the gains from trade between the two countries : Norway has a long coast that borders on the north Atlantic, making it relatively more productive in fishing. Sweden has a greater endowment of capital, making it relatively more productive in automobiles.

An example where the lack of communication : Provide an example where the lack of communication has resulted in a negative impact. List three (3) factors that caused the communication breakdown.

How this would affect concept of factor-price equalization : Explain how this would affect the concept of factor-price equalization.

Describe operations of an entrepreneur in generating profit : The entrepreneur can make a living from applying his hard earned skills in his business.- describe the operations of an entrepreneur in generating profit.

Communicating with a cross-cultural workforce : You have been recently promoted as junior vice president of human resources at your organization. You need to prepare your first presentation on appropriate communication to a group of twenty newly-hired employees for their orientation. The profil..

User Account

All Pages