Which country has a comparative advantage in what and why

Assignment Help Business Economics

Reference no: EM131236886

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. a. Which country has a comparative advantage in what and why? b. Draw the production possibility frontiers of England and Portugal if migration is illegal. Indicate the maximum gains from trade for each country. c. Draw the production possibility frontier of the world if migration is legal and if it is illegal.

Reference no: EM131236886

Questions Cloud

Labor and capital receive of total income : In macroeconomics, we assume that total rental and labor income (wL+rK) is equal to total output (Y), use your previous answers to show that Income=Output is the case. What are the shares of Income that Labor and Capital receive of total income? (As ..

The value of the consumer price index : In May? 2013, the value of the Consumer Price Index? (CPI) in a certain? country, Polonia, reached an? all-time high of 240 index points and per capita nominal GDP was? $42000. In January? 1950, the CPI was at its lowest at 68. Calculate real GDP per..

Using standard diagram with an upward-sloping demand curve : What are the likely consequences on the U.S. market for tobacco products for each of the events listed below? Would the supply curve or the demand curve shift? Please indicate the direction of the shift. State whether the equilibrium price and the qu..

Deals with a highly competitive industry : Please analyze a current events article that deals with a highly competitive industry such as online advertising. Your analysis should include the factors driving change in the industry. Decide if there are potential changes due to globalization or t..

Which country has a comparative advantage in what and why : 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 ..

Substitute flying for driving to their vacation destinations : A study found that lower airfares led some people to substitute flying for driving to their vacation destinations. This reduced the demand for car travel and led to reduced traffic fatalities, since air travel is safer per passenger mile than car tra..

Pairs of goods are likely to be classified as substitutes : Which of the following pairs of goods are likely to be classified as substitutes? Complements? Defend your answer. Peanut butter and jelly Eggs and ham Nike brand and Reebok brand sneakers IBM and Apple Macintosh brand computers Dress shirts and ties..

What would his contract be worth at the time he signs? it : A local newspaper headline? blared, "Bo Smith Signed for? $30 Million." A reading of the article revealed that on April? 1, 2014, Bo? Smith, the former? record-breaking running back from Football? University, signed a? $30 million package with the Da..

Assess how different economic environments : Assess how different economic environments, such as boom and bustcycles, affect markets both individually and collectively. In other words, consider how economic growth or scarcity affects individual markets and how the economic environment for one m..

User Account

All Pages