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In The No-Trade Equilibrium Stormlands: WageL = 24 WageW = ? MPLL = 4 MPLW = ? PL = ? PW = 4
Reach: Wage*L = ? Wage*W = 6 MPL*L = ? MPL*W = 1 P*L = 3 P*W = ?
(a) Which country has a comparative advantage in wheat and why?
(b) Suppose that in the trade equilibrium PL/PW = 1.2. Which good which each country export?
(c) For each country, calculate the real wage in terms of lumber and in terms of wheat.
(d) For each country, compare the values you obtained in part (d) with the real wage in terms of either good in the no-trade equilibrium. Do White Walkers in each country gain from trade?
Your project has an estimated cost for land reclamation to be realized at the end of 20 years from today for $70,000,000. If current bond long-term interest rates are 7% compounded
1. Consider two projects. The first project pays benefits of $90 today and nothing else. The second project pays nothing today, nothing one year from now, but $100 two
x=40-0.2p where x=x1+x2 c1=50+2x1+0.5x1 c2=100+10x2
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