The advertising campaign makes foreigners demand

Assignment Help Business Economics

Reference no: EM131239051

Is anyone can solve this question?

This problem asks you to think of issues using a relative demand and sup- ply framework more generally. The U.S. and the “rest of the world”(ROW) are the two countries in the world. They make two goods, Food (F) and Wine (W) The U.S. exports W:

a: What would be the e¤ect of an advertising campaign to promote W in the ROW? ( Assume that the advertising campaign makes foreigners demand more W relative to F at any relative price.) What would shift? What would happen to relative prices in the world? Would the U.S. gain or lose from such advertising if advertising is essentially costless?

b: A war destroys half of ROW’s productive capacity shrinking its Production Possibility Frontier (PPF) uniformly inwards for all goods. What would shift? What would happen to prices in the world? Would the U.S. gain or lose? What about ROW?

c: Suppose that the US consumes mostly wine while the rest of the world consumes mostly food. Would there be a secondary burden of foreign aid given by the US to the ROW? Could the US reduce this secondary burden by giving its aid in barrels of wine? Why/Why not?

Reference no: EM131239051

Questions Cloud

Find coupon payment based on coupon rate and face value : Calculate the current yield for this bond. Suppose the corporate bond has an initial price of $1,600 and its price increases to $1,650 next period. Carry your answer to three decimal places--e.g., 11.125%. Find the coupon payment based on the coupon ..

Differentiate the skills and roles of a manager : Develop a 1,400-word analysis in which each of the following points is addressed: Differentiate the skills and roles of a manager. Explain the fundamental responsibility of any manager

Why status can be viewed as an ordinal variable : Refer to the death penalty data given in Exercise 10. Identify which variables are related to the binary response "Allows Death Penalty" (STATUS is a, b, or c) versus "No Death Penalty" (STATUS is d). Form a model and use the model to estimate the..

Briefly summarizes the given article : Briefly summarizes the article - Identifies the author's claims and provides evidence of the strength or validity of the author's claims.

The advertising campaign makes foreigners demand : What would be the e¤ect of an advertising campaign to promote W in the ROW? ( Assume that the advertising campaign makes foreigners demand more W relative to F at any relative price.) What would shift? What would happen to relative prices in the worl..

Employee posted unflattered comments : How would you react if you learned one of your employee posted unflattered comments about you as manager? would you reaction be anything different if the employee posted unflattered comments about you as a person?

Compute 95% confidence intervals for each odds ratio : Obtain model-averaged estimates of the odds ratios corresponding to the effect of each explanatory variable. Interpret these values.

Compare the tax incidence in the short run to the long run : Suppose the government institutes a tax on soft drinks. Assume that short-run and long-run demand curves are the same, while the long-run supply curve is more elastic than the short- run supply curve. Compare the tax incidence in the short run to the..

Probability of tripling her investment : An investor is considering two alternatives for which she has Rs. 1,00,000 to invest. The first is commercial property; the second is stocks. Analysis has revealed that the property alternative offers a 0.50 probability of tripling her investment ..

User Account

All Pages