What are the gains from trade for each country

Assignment Help Business Economics

Reference no: EM131241422

Suppose that in England 5 man-hours are required to produce each cask of wine and 5 man-hours are required to produce each bolt of cloth, whereas in Portugal 1 man-hour is required for a cask of wine and 4 man hours for a bolt of cloth. Each country has a labor force of 100 man-hours. If everyone in the world consumes exactly one bolt of cloth for each cask of wine, which country will export how much of what (if migration is illegal)? What are the gains from trade for each country? Hint: Can we figure out the equilibrium terms-of-trade without calculating the excess demand function(s)?

Reference no: EM131241422

Questions Cloud

What change processes may be required : Based upon the stakeholder group analyses, recommend the best solution for Ashford General Hospital with detailed justification. Explain why you feel it is the most viable and appropriate solution given the financial impact, HR issues, and interpe..

Projectile was launched to where it hits its target : What is the straight-line distance from where the projectile was launched to where it hits its target?

Market demand for chicken meat exemplifies : The world market demand for chicken meat exemplifies a typical demand relationship. On your answer sheet, draw a graph of the initial market demand curve for chicken meat in the world. Assuming chicken meat is a(n) normal good, a(n) decrease in numbe..

The world market demand for aluminum exemplifies : The world market demand for aluminum exemplifies a typical demand relationship. On your answer sheet, draw a graph of the initial market demand curve for aluminum in the world. Assuming aluminum is a(n) normal good, a(n) decrease in preferences (and ..

What are the gains from trade for each country : Suppose that in England 5 man-hours are required to produce each cask of wine and 5 man-hours are required to produce each bolt of cloth, whereas in Portugal 1 man-hour is required for a cask of wine and 4 man hours for a bolt of cloth. What are the ..

Company makes and sells skateboards at an average price : The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. Which of the following would ..

Graph the weekly budget line : Tom earns $20 per hour for up to 40 hours of work each week. He is paid $30 per hour for every hour in excess of 40. Tom faces a 10 percent tax rate and pays $5 per hour in child care expenses for each hour he works. Tom receives $100 in child suppor..

Measures that percentage share of the total sales : The four-firm_______________ measures that percentage share of the total sales in the industry that is accounted for by the largest four firms. When the regulators sets a price that a firm cannot exceed over that next few years, the regulator is enfo..

User Account

All Pages