Ricardian Model Assignment | Homework For You
My subject is actually international economics, and this exercise belongs to the chapter of the Ricardian model.
7. The table shows unit labour requirements for a tonne of paper and a personal computer(PC) for two countries, Indonesia and Japan. Unit labour requirement1 ton of paper1 PCIndonesia15Japan1/22Unit labour requirement shows the number of hours of labour required to produce one unit of good.
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4a) Which country has an absolute advantage in paper production, and which in the production of PCs? Explain.
b) Which country has a comparative advantage in a paper production, and which in a production of PC-s? Why? Is absolute advantage a precondition for achievement of a comparative advantage?
c) If Japan has 200 units of labour available, and Indonesia 300 units of labour, draw the production capabilities of Japan and Indonesia. Find some combinations of goods that these economies can consume in autarky.
d) What does the production possibility frontier show? How is its slope defined?
e) If a world relative price of paper is established in the international trade as Pp/Ppc = 3/9, docountries benefit from trade? Get Business Law homework help today