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Please answer each question with sufficient detail. Relevant detailed responses are highly rewarded. If you consult any sources, then you should provide both in-text citations and references at the end of each response. You need to make sure at least consult your textbook for your responses.
1. Explain how the international movement of products and of factor inputs promotes an equalization of the factor prices among nations.
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- When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Candonia and Sylvania. Both countries Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure. produce lemons and coffee, each initially (i.e., before specialization and trade) producing 18 million pounds of lemons and 9 million pounds of coffee, as indicated by the grey stars marked with the letter A. Candonia has a comparative advantage in the production of lemons, while Sylvania has a comparative advantage in the production of coffee. Suppose that Candonia and Sylvania specialize in the production of the goods in which each has a comparative…Using a production possibilities frontier determine how does a country's PPF change in response to the events described below . Make sure to explicit what sort of assumption each event implies (neutral effect or sector biased effect).and what sectors you are representing . The latter follows from your assumptions on the factor intensity of the sector you are representing. 1. Reducing import taxes on primary inputs. 2. The discovery of new mineral deposits in a country.Instructions: Answers must be typewritten, graphs can be drawn by hand and inserted in the document. Using the same amount of resources, Australia and New Zealand can both produce apples and oranges as shown in the following table, measured in thousands of tonnes. a) Who has a comparative advantage in producing apples? Who has a comparative advantage in producing oranges? Explain your reasoning (show your calculations) b) Does either country have an absolute advantage in producing both goods? Explain. c) Suppose that both countries are currently producing 3000 tonnes of apples and 3000 tonnes of oranges. Show and explain that both can be better off if they specialise in producing one good and then engage in trade.
- 2. Factor-price equalization The fictional country of Tomczakistan is a nation that is relatively rich in capital resources. It can produce two types of goods, capital-intensive goods and labor-intensive goods. Tomczakistan's production possibilities frontier (PPF) is shown on the following graph. Currently, Tomczakistan is closed to international trade and producing at the grey point (star symbol) labeled A on the graph. Suppose that Tomczakistan is going to trade with Leightvania, a country that is relatively rich in labor and was also previously closed to international trade. On the following graph, use the green point (triangle symbol) to indicate which way Tomczakistan will adjust its production by placing it on one of the two black points (plus symbol). Dashed droplines will automatically extend to both axes. LABOR-INTENSIVE GOODS 10 9 0 0 1 2 3 4 7 CAPITAL-INTENSIVE GOODS 1 5 6 + Once trade begins, the price of capital in Tomczakistan 9 10 A New Production (? In Leightvania, the…2. Factor-price equalization The fictional country of Tomczakistan is a nation that is relatively rich in capital resources. It can produce two types of goods, capital-intensive goods and labor-intensive goods. Tomczakistan's production possibilities frontier (PPF) is shown on the following graph. Currently, Tomczakistan is closed to international trade and producing at the grey point (star symbol) labeled A on the graph. Suppose that Tomczakistan is going to trade with Leightvania, a country that is relatively rich in labor and was also previously closed to international trade. On the following graph, use the green point (triangle symbol) to indicate which way Tomczakistan will adjust its production by placing it on one of the two black points (plus symbol). Dashed droplines will automatically extend to both axes.How have changes in technology contributed to the globalization of markets and production? Would the globalization of production and markets have been possible without these technological changes? [Note: Diagrammatic representation is mandatory to elaborate your conceptual understanding
- Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000. (d) Which country has the comparative advantage in food? In fuel? Explain. (e) Which good(s) should each country specialize in?I need assistance with this economics assignmentQuestion 1 Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the following events: Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing.
- 1. Consider the following example of the Ricardian model Units of labor required per unit of output: France (F) Italy (I) 5 2 Beef (B) Corn (C) 3 4 Labor Force (a) Determine which country has an absolute advantage in which good and which country has a comparative advantage in which good. Compute opportunity cost ratios and relative autarky prices, defined as PC/PB. 48000 50000 (b) Draw the PPFs (put C on the horizontal axis) and label endpoints with appropriate figures. Supposing that each country splits its labor force in half between C and B in autarky, show the autarky equilibrium. (c) Now let the price ratio established in trade equal (Pc/PB)* = 1.0 and suppose France exports 500 units of beef. Determine each country's imports and exports, show the equilibrium trade triangles and compute the gains from trade for each country in terms of units of B and C. Briefly indicate which country gets larger gains and why.Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below.Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing.a) A relaxation of policies allowing more foreign direct investment into the country.b) Increasing the minimum wage level.c) A decrease in expenditure on research and development.d) An increase in the retirement age.e) Government policies supporting the provision of services, without affecting ManufacUsing a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below.Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing. a) A relaxation of policies allowing more foreign direct investment into the country. b) Increasing the minimum wage level. c) A decrease in expenditure on research and development. d) An increase in the retirement age. e) Government policies supporting the provision of services, without affecting manufacturing.