User Account

All Pages

What is the impact of opening trade on the real return

Assignment Help Business Management
Reference no: EM132667641

Assume two countries Argentina and Brazil that produce two goods, corn and wine. Assume that land is specific to corn, capital is specific to wine, and labor is free to move between the two industries. Assume that Brazil has a comparative advantage in corn, and Argentina has a comparative in wine. Brazil and Argentina sign a free trade agreement, and we want to study the consequences of this trade agreement.

a) Is it possible that real wages move in opposite directions in these two countries with the trade agreement? Explain.

b) What is the impact of opening trade on the real return to capital and land in Brazil and in Argentina? Explain.

c) In each country, has the specific factor in the export industry gained or lost, and has the specific factor in the import industry gained or lost? Explain

d) Now assume that corn is produced with labor and capital (instead of land). Moreover, Brazil and Argentina, as part of the agreement, implement reforms so that capital and labor become perfectly mobile across industries. Assume that wine is capital intensive relative to corn. Brazil still has comparative advantage in corn and Argentina in wine. Which group, capital owners or workers, are better off with the trade agreement in Brazil and in Argentina compared with autarky? Explain.

Reference no: EM132667641

Questions Cloud

Benefits of using transaction processing systems : describe the benefits of using transaction processing systems, customer relationship systems, functional area information systems, and supply chain management.
Determine the total amount of startup expenditures : The corporation incurs startup expenditures of $64,000. If Oleander elects § 195 treatment, determine the total amount of startup expenditures
How can government get rid of deadweight loss : Where should the society output be and why? Why do we have deadweight loss?
Record the entry to establish contract payable for walkway : Record the entry to establish the contract payable for the walkway. The City of Waterman established a capital projects fund for the construction of an access
What is the impact of opening trade on the real return : b) What is the impact of opening trade on the real return to capital and land in Brazil and in Argentina? Explain.
Which country is relatively capital abundant : Which country is relatively capital abundant? Which country is relatively labor abundant? Explain.
Record the payment of contract payable and vouchers payable : Record the payment of the contract payable and vouchers payable. The City of Waterman established a capital projects fund for the construction
Focused on problem solving and decision making : This lecture focused on problem solving and decision making. What are some of the toughest decisions you've had to make in your life?
Calculate the amount of shortage in the market : Mathematically calculate the amount of shortage in the market, and the number of winners and losers found in this market.

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd