Q1. A fact that confirms that the United States of America have progressively become a more capital-intensive economy over the last 50 years...
A) ...is that the average level of K/L across industries in the USA has been increasing from 1960 to 2000
B) ...is that the capital stock has been decreasing from 1960 to 2000
C) ...is that the labor force has decreased from 1960 to 2000
D) ...is that the United States are relatively capital abundant compared to Mexico
Q2. Consider 2 Countries, A and B.
A is relatively capital abundant compared to B, while B is relatively labor abundant.
S is a capital intensive good, while T is labor intensive.
In an economy as the one described in Lecture 4, in which A and B have the same community indifference curves and technology...
A)Not enough information
B)PS/PT in autarky in Country A < PS/PT in autarky in Country B
C)PS/PT in autarky in Country A > PS/PT in autarky in Country B
D)PS/PT in autarky in Country A = PS/PT in autarky in Country B
Q1. A fact that confirms that the United States of America have progressively become a more capital-intensive economy over the last 50 years...
A) ...is that the average level of K/L across industries in the USA has been increasing from 1960 to 2000
B) ...is that the capital stock has been decreasing from 1960 to 2000
C) ...is that the labor force has decreased from 1960 to 2000
D) ...is that the United States are relatively capital abundant compared to Mexico
Q2. Consider 2 Countries, A and B.
A is relatively capital abundant compared to B, while B is relatively labor abundant.
S is a capital intensive good, while T is labor intensive.
In an economy as the one described in Lecture 4, in which A and B have the same community indifference curves and technology...
A)Not enough information
B)PS/PT in autarky in Country A < PS/PT in autarky in Country B
C)PS/PT in autarky in Country A > PS/PT in autarky in Country B
D)PS/PT in autarky in Country A = PS/PT in autarky in Country B
Related textbook solutions
Related questions
Draw the graph carefully. Please use one graph per country and show both the autarky and the free trade equilibrium on each graph.
Consider the following data on the factor endowments of two countries A and B:
|
Countries |
||
|
Factor Endowments |
A |
B |
|
Labor force: L |
100 workers |
50 workers |
|
Capital Stock: K |
60 machines |
10 machines |
a. Which country is relatively capital abundant? Which country is relatively labor abundant? Explain (calculate the ratios).
b. Supposing that cars are capital intensive relative to shoes, which country will have a comparative advantage in the production of cars? Of shoes? Explain.
c. Graphically demonstrate the pre-trade and post-trade equilibrium between these two countries (production and consumption points). Draw a Demand Diagonal. Find and label the trade triangles for each country.
d. Which factor gains and which factor loses when trade arises between these two countries? Explain precisely.
