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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. The migration model of Todaro and Harris provided an important theoretical critique of the manufacturing-biased import-substitution trade-policy stance. Illustrate. Answer:
Q. Based on the case study, answer the following question: Can currency boards make fixed exchange rates credible? Answer: No for the reason that is prohibited by law from a
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What effect do non-tradable goods have on PPP? Answer: The consequence is quite substantial. In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP.
Q. Imagine a world with two large countries, Home and Foreign. Evaluate how Home's macroeconomic policies affect Foreign. Compare the small and the large country cases; consider
It is argued that a tarriff may help promote employment in a single industry, but is not likely to help employment in general
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