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Q.. "A good cannot be both land- and labor-intensive." Discuss.
Answer: In a two good or two factor models for instance the original Heckscher-Ohlin framework and the factor intensities are relative intensities. Therefore, the relevant statistic is also workers per acre (or acres per worker) or rental per wage or wage per rental unit. In order to exemplify the logic of the statement above, let us suppose that the production of a broom requires 4 workers and 1 acre. As well, let us suppose that the production of one bushel of wheat requires 40 workers and 80 acres. In this case the acres per person necessary to produce a broom is one quarter, where to produce a bushel of wheat requires 2 acres per person. The wheat is thus (relatively) land intensive furthermore the broom is (relatively) labour intensive.
Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency? Answer: A vehicle currency is one specifically widely used to denominate inter
Q. Analyze the effects of an increase in the European money supply on the dollar/euro exchange rate. Answer: The major points are: A raise in the European money supply will re
Present and explain the Fundamental Equation of the Monetary Approach. Answer: Suppose E $ /E = P US /P E and that domestic price levels depend on domestic money demands and
Although the elegance and comprehensiveness of transactions costs reasoning has provided the internalisation approach with a powerful logic (Rugman, 1981, 1985), it is still defici
briefly summaries the alternative explanation to the theory of international trade?
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Q. Countries do not in fact export the goods the H.O. theory predicts. Discuss. Answer: This statement isn't true that though one may find several cases where it seems to be
discuss the superiority of haberler''s theory of opportuinity cost over mill''s theory reciprocal demand?
the New Trade Agenda
Q. Now, consider that the relative price of A is actually not higher than Albania's autarkic level of 1, but quite the opposite (e.g. PA/PB = 0.5). Could Albania still be able t
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