Exam 2: Trade and Technology: the Ricardian Model

SCENARIO: United States Versus United Kingdom In the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day.In the United Kingdom, one worker can Produce 5 tons of steel per day or 15 tons of chemicals per day. Reference: Ref 2­11 (Scenario: United States Versus United Kingdom) International trade will Occur between the United States and the United Kingdom so long as a Ton of steel trades for:

Because the PPF is a straight line in the Ricardian model, Foreign's Import demand curve is:

SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE Poland requires 4 hours of labor to produce a ton of coal and 10 hours of Labor to produce 10 bushels of wheat.The Czech Republic requires 6 Hours of labor to produce a ton of coal and 10 hours of labor to produce 10 bushels of wheat. Reference: Ref 2­5 (Scenario: Absolute and Comparative Advantage) Which country has a Comparative advantage in the production of wheat?

SCENARIO: CHILE AND ARGENTINA Chile and Argentina each produce jellybeans and peanut butter, using Labor as their only resource.Each country has 1,000 hours of labor.In Chile, an hour produces a pound of jellybeans and 2 hours produce a Pound of peanut butter.In Argentina, an hour produces a pound of Jellybeans and 3 hours produces a pound of peanut butter.When they do Not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of Jellybeans and 200 pounds of peanut butter. Reference: Ref 2­10 (Scenario: Chile and Argentina) Which country has an absolute Advantage in jellybean production?

A country's indifference curve describes combinations of goods that:

Suppose that the introduction of computers increases the productivity of Workers in the developed world.What you would expect wages to do?

The focus of the Ricardian model is on how:

If prices of a nation's exported products rise in comparison to prices paid For imports, that nation experiences a:

SCENARIO: ABSOLUTE AND COMPARATIVE ADVANTAGE Poland requires 4 hours of labor to produce a ton of coal and 10 hours of Labor to produce 10 bushels of wheat.The Czech Republic requires 6 Hours of labor to produce a ton of coal and 10 hours of labor to produce 10 bushels of wheat. Reference: Ref 2­5 (Scenario: Absolute and Comparative Advantage) Which country has a Comparative advantage in the production of coal?

Figure: International Trade Equilibrium (Figure: International Trade Equilibrium) After trade, how many units of wheat will this nation consume?

Figure: Home Equilibrium with No Trade (Figure: Home Equilibrium with No Trade) Under the condition of no Trade, which combination of the following is NOT attainable?

Assume that, in autarky, an economy has 150 workers and the MPLc is two cars and the MPLb is five boats.Demonstrate how one can derive the autarkic price of cars in this economy.

Assume that two countries (Home and Foreign) each produce two goods (corn and wheat) under constant cost production.Home produces 0.5 Ton of corn or 1 ton of wheat with a day of labor.Without trade (in Autarky), Home's daily production is 20 tons of wheat and 10 tons of Corn.How large is Home's labor force?

Figure: Indifference Curves (Figure: Indifference Curves) Which point on the diagram represents the "home" equilibrium in the absence of international trade?

SCENARIO: CHILE AND ARGENTINA Chile and Argentina each produce jellybeans and peanut butter, using Labor as their only resource.Each country has 1,000 hours of labor.In Chile, an hour produces a pound of jellybeans and 2 hours produce a Pound of peanut butter.In Argentina, an hour produces a pound of Jellybeans and 3 hours produces a pound of peanut butter.When they do Not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of Jellybeans and 200 pounds of peanut butter. Reference: Ref 2­10 (Scenario: Chile and Argentina) In order for Chile to gain from trade, the Price of jellybeans must be less than:

The Ricardian model employs the concept of alternate uses of economic Resources in production.We refer to this technique as:

A worker's "real" wage is related to:

In equilibrium, which of the following statements regarding the relative Price of a tomato versus a book is CORRECT? I.It is the opportunity cost of a tomato. II.It is how much the production of books must fall in order to produce Another tomato.

An increase in the price of imported goods will:

The flat part of Home's export supply curve in the Ricardian model is due To the assumption that: