1. Business
  2. Economics
  3. assume that home and foreign produce 2 goods highdefinition televisions...

Question: assume that home and foreign produce 2 goods highdefinition televisions...

Question details

Assume that Home and Foreign produce 2 goods, High-Definition televisions and kiwi fruit. Use the following information to answer the questions. a) The Home Country is endowed with 10 workers and has the following marginal products: MPLTV = 2, MPLK = 4. Illustrate the Home country’s PPF, placing televisions on the x-axis. Fully label your graph. (2 pts)

b) The Foreign Country is also endowed with 10 workers and has the following marginal products: MPL*TV =1, MPL*K =3. Illustrate the Foreign country’s PPF, placing televisions on the x-axis. Fully label your graph. (2 pts)

c) What is the no-trade relative price of TVs in each country? (2 pts)

d) Predict the pattern of trade if the world relative price for televisions is PTV/PK = 2.5. (2 pts)

e) What has happened to the real wage for Home country workers? (Be specific) (2 pts)

Pleeaaasseeeee help ! Thanks!

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution