Redraw these two graphs and show a possible trade equilibrium between these two
ID: 1168101 • Letter: R
Question
Redraw these two graphs and show a possible trade equilibrium between these two countries.
(1) Draw and label possible price lines after trade.
(2) Identify post-trade production points in both countries.
(3) Identify post-trade consumption points in both countries..
(4) Identify exports of both countries.
(5) Identify imports of both countries.
(6) Identify the trade triangles of both countries.
2. When Wassily Leontief tested the predictions of the Heckscher-Ohlin theory, he found that in 1947 the United States was exporting relatively labor-intensive goods and importing relatively capital-intensive goods. This finding:
Select one:
a. Contradicted the Heckscher-Ohlin theory as the United States was assumed to be relatively capital-abundant.
b. Contradicted the Heckscher-Ohlin theory as the United States was assumed to be relatively labor-abundant.
c. Was never duplicated by other studies and has thus been labeled a paradox.
d. Fit the predictions of the Heckscher-Ohlin theory concerning the trading patterns of a capital-abundant country.
3. Which of the following would least likely apply to the product life cycle theory?
Select one:
a. Calculators and computers
b. Coal and crude oil
c. Home movie cameras
d. Office machinery
4. Historically, some industries developed due to pure coincidence or accidental reasons. Swiss watches, Georgian quilts - are examples. Countries with such industries eventually become well-known exporters of these goods. Which of the following will not be a contributing factor behind this phenomenon?
Select one:
a. Internal economies of scale
b. External economies of scale
c. Hotelling's clustering phenomenon.
d. Product Cycle Model.
5. Country X produces two goods, food and clothing. Presently, 40 units of food are produced and 20 units of clothing are produced. 10 units of food are exported and 10 units of clothing are imported. Now suppose new technology in Country X leads to balanced growth while leaving the prices of food and clothing unchanged. Production of food rises to 50 units and production of clothing rises to 25 units. If consumption of food rises to 42 units, we can conclude:
Select one:
a. Consumption of clothing has risen to 33 units.
b. 10 units of food are exported.
c. 17 units of clothing are imported
d. Consumption of food has fallen.
6. The situation illustrated in the figure below is an example of:
Select one:
a. A small country experiencing a balanced growth.
b. A large country experiencing a balanced growth.
c. A small country experiencing growth biased toward cloth production.
d. The immiserizing growth effect.
7. Consider the following graph. The country's resources have grown over time and production has shifted from S1 to S6. the graph shows that after growth occurs:
Select one:
a. The country exports more and imports less because the terms of trade of the country falls.
b. The country exports more and imports less because the terms of trade of the country rises.
c. The country exports less and imports more because the terms of trade of the country rises.
d. The country exports less and imports more because the terms of trade of the country falls.
8. The Rybczynski theorem suggests that the development of new sources of a natural resource in a country that exports that natural resource:
Select one:
a. will increase overall production in that country.
b. may put pressure on the country to increase both exports and imports.
c. will decrease overall production in the country.
d. may retard the development of other lines of production in that country.
9. Assume that:
Currently the US per capita income is approximately: $53,101
The Canadian per capita income is approximately: $43,472
Mexican per capita income is approximately: $15,563
US Canada trade volume is about $726 billion
US Mexico trade volume is about $506 billion.
Assuming that ? (alpha) = 1.45
? (beta) = 1.08
Using the gravity model equation and assuming that the distance between the US and Canada is zero - as is the distance between the US and Mexico, we can say that:
Select one:
a. The gravity model does not approximately predict the volume of trade between the US and Canada.
b. The gravity model does not approximately predict the volume of trade between the US and Mexico.
c. The gravity model accurately predicts the volume of trade between the US and Canada and the US and Mexico.
d. The gravity model predicts exactly what the Heckscher-Ohlin model predicts.
10. A country exports 5 billion dollars worth of cars but also imports 5 billion dollars worth of cars. The intra-industry trade index for this country for the car industry is:
Select one:
a. 5
b. 10
c. 1
d. 0
11. If a country's PPC is concave to the origin ("bowed in") with Y on the vertical axis and X on the horizontal axis,
Select one:
a. As the country produces more X, marginal cost of producing X falls.
b. As the country produces more Y, marginal cost of producing Y falls.
c. The country may have comparative advantage in any good, X or Y.
d. All of the above.
e. None of the above.
THANK YOU!!
Explanation / Answer
Answer 2 : b -Contradicted the Heckscher-Ohlin theory as the United States was assumed to be relatively labor-abundant.
Answer 3 : b - coal and crude oil
Answer 4 : d - Product life cycle
Answer 5 : a - Consumption of clothng has risen to 33 units.
Answer 6 : Incomplete information ( graph is not visible)
Answer 7 : Incomplete information ( graph is not visible)
Answer 8 : a - will increase the overall production in that country
Answer 9 : c - The gravity model accurately predicts the volume of trade between the US and Canada and the US and Mexico.
Answer 10 : d - All of the above
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.