Imagine That There Are Only Two Countries In The World: America And China.

Imagine that there are only two countries in the world: America and China. Each country produces and consumes two goods – a tradable good (T) and a non-tradable good (NT). The production of these goods involves the use of labour, but no other resources are used in the production process. This is of course a ridiculous assumption, but it is one we will make for the purposes of this assignment. There are perfectly competitive markets for the non-tradable good (NT) in each country, but no trade in this good between the countries. There is a perfectly competitive global market in the traded good (T). Labour is homogeneous within America. An hour of labour produces 10 units of the traded good (T) or 5 units of the non-traded good (NT) in America. Labour costs are 10 dollars (USD) an hour in America. Labour is also homogenous within China. An hour of labour produces 5 units of the traded good (T) or 5 units of the non-traded good (NT) in China. Labour costs are 10 yuan (CNY) an hour in China. Identify the price in local currency of a unit of the traded good (T) in each country. (1 mark) Identify the price in local currency of a unit of the non-traded good (NT) in each country. (1 mark) Suppose that the law of one price holds for the traded good. What would be the value of one yuan in terms of USD? In other words, what would the market CNY/USD exchange rate be, if it was set by the law of one price in T? (1 mark) Suppose that the cost of living in each country can be estimated using a basket of goods, consisting of one unit of T and one unit of NT. Identify the cost of living in local currency in both China and the USA. (2 marks) The absolute purchasing power parity exchange rate (one yuan in terms of dollars, or CNY/USD) is the rate which equates the cost of living in the two countries. What is this APPP exchange rate? (1 mark) Which currency is undervalued, relative to its PPP level? What is the cause of this undervaluation? What is the value of the real exchange rate, where the CNY is the commodity currency and the USD is the terms currency? (3 marks) Suppose that over time the productivity per hour of labour in China in the tradable good industry increases to 10 units of T, while the other three productivity figures do not change. What will happen to the real exchange rate? (1 mark) question6

High Involvement And Extended Search Is Referred To As Which Type Of Decision -making

high involvement and extended search is referred to as which type of decision -making process

Two Countries Use One Production Factor, Labor, To Produce Two Goods, Noodles And Jeans.

Two countries use one production factor, labor, to produce two goods, Noodles and Jeans. In Country A, it requires 1 unit of labor to produce 1 unit of Noodles and 2 units of labor to produce 1 unit of Jeans. In Country B, it requires 2 units of labor to produce 1 unit of Noodles and 3 units of labor to produce 1 unit of Jeans. Country A has 20 units of labor; Country B has 30 units of labor. Which country has the comparative advantage in Noodles? Draw the world production frontier. Draw the relative supply curve of the world. What is the range of relative price under which each country specializes in their comparative advantage industry? Explain why there are gains from trade if there are specialization. The countries further sign an agreement that reduces barrier of movement of labor across borders. Which country would you expect to have outflow of workers? Why? According to the agreement, the inflow of workers to the recipient country is capped at 6. What is the new equilibrium allocation of labor in Country A and Country B? Draw the new world production frontier. State any assumption you need. Due to historical reason, 30% of the population in Country A has a Country B origin. After the agreement is signed, they want to move back to Country B. What is the implication on the world production frontier? Based on original settings. Country B has a productivity catchup in its Noodles production. Now it only requires 1.5 units of labor to produce 1 unit of Noodles in Country B. What is the implication on trade? How does this productivity catchup impact the gains from trade in Country A? Why?

A Consumer Lives For T 1 Periods, T = 1 Through T =

A consumer lives for T 1 periods, t = 1 through t = T 1, where T ≥4. She decides in each of the periods 2 through T whether to hit. Hitting in a period t gives an instantaneous pleasure of 4 in period t, and generates an instantaneous cost of 3 in period t 1. The price of a hit in the market is 2, which has to be paid immediately in any period in which the consumer hits. (Note that in the model considered in class, we did not have such a price for hitting.) The consumer is a hyperbolic discounter with β =1/2 and δ = 1. (a) Show that both if the consumer is sophisticated and if she is naive, she hits in every period 2 through T. Show that all selves would be better off with a lifetime of no hitting. (b) Now consider a system of advance orders. In each period t = 1, … , T −1, the consumer can submit an order for a hit in period t 1. If she submits an order in period t, a hit is delivered to her in period t 1, and she must pay for the hit on delivery. If she does not submit an order in period t, she cannot hit in period t 1. What does a naive consumer do? What does a sophisticated consumer do? Is the system of advance orders effective in preventing harmful over consumption? If not, can you think of an improvement to the system? Explain the intuition for your answers. (c) Suppose that in period 1, the consumer has to decide (e.g. through voting) whether to set up a system of advance orders as in part (b) or have a spot market as in part (a). The cost of setting up the system of advance orders is 1. Does a naive consumer choose to set up advance orders? How about a sophisticated consumer? Explain the intuition. (d) Now suppose that the pleasure from hitting is uncertain. In each period 2 through T, the pleasure is 3 with probability one-half and 8 with probability one-half, and the pleasures in different periods are independent from each other. The consumer learns the pleasure from hitting in period t at the beginning of period t, and knows only the above two possibilities and their probabilities beforehand. The price of a hit is still 2, and the utility cost in the next period is still 3. Without a system of advance orders, what does each type of consumer do? (e) Now consider advance orders in the setting in part (d) with uncertainty in the pleasure from hitting. What does each type of consumer do with advance orders? Do advance orders prevent harmful overconsumption? If not, can you think of an improvement to the system? Explain the intuition for your answers.

In The Table Below, Column I Gives Functions F(x, Y) That Depend On Variables

In the table below, column I gives functions F(x, y) that depend on variables x and y. For columns II and III, take partial derivatives. For column IV, divide the partial derivatives and simplify. (This quotient will play a key role in chapters 5 and 6; for now, just do the math!) Hint: Before taking derivatives, get the function looking the right way (see the calculus handout from the first day of class). For example, first rewrite the function in problem 0 as: [x 2]2y = [x2 4x 4]y = x2y 4xy 4y = x2y1 4x1y1 4x0y1. In this way, you see all of the powers for each variable and can apply the power rule. Skip this preliminary step and risk getting the wrong answer. For this ,you need only fill in the chart you do not need to show your work. I) F(x, y) II) ∂F(x, y) / ∂x III) ∂F(x, y) / ∂y IV) ∂F(x,y)⁄∂x ∂F(x, y)⁄∂y 0) [x 2]2y 2xy 4y {or 2y[x 2]} x2 4x 4 {or [x 2]2} 2y / [x 2] 1) x3/4y1/4 [3/4]x−1/4 y1/4 3y / x 2) x3y 3) 25xy 4) 5×1/2y1/2 5) x2   y 2x 6) 2x y 7) x1/3 y1/3 8) x3   y3 9) [2x y]2 10) [x − 3][y − 1] 11) x1/2 y 12) x1/2y

Summarize The Key Thoughts Or Ideas Behind Each Of The Main Theories Of

Summarize the key thoughts or ideas behind each of the main theories of motivation below. -Need theories (Maslow, Alderfer, Herzberg) -Expectancy theory -Goal-setting theory -Social Learning theory -Equity theory -Reinforcement theory/Behavior Modification.

Emily​ Dorsey’s Current Salary Is ​$79,000 Per​ Year, And She Is Planning To Retire

Emily​ Dorsey’s current salary is ​$79,000 per​ year, and she is planning to retire 25 years from now. She anticipates that her annual salary will increase by ​$1,000 each year ​($79,000 the first​ year, to ​$80,000 the second​ year, ​$81,000 the third​ year, and so​ forth), and she plans to deposit 5​% of her yearly salary into a retirement fund that earns 6​% interest compounded daily. What will be the amount of interest accumulated at the time of​ Emily’s retirement? Assume 365 days per year

Table 1 Shows The Short-run Cost Data Of A Perfectly Competitive Firm That Produces

Table 1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. Refer to Table 1 for questions 8-13. 13) The firm will not produce in the short run if the output price falls below A) $8. B) $4. C) $3.20. D) $2.80.

Explain Budget Constraint. Graph The Constraint Budget Below. Joe Has 250 Dollars To Spend

Explain Budget constraint. Graph the constraint budget below. Joe has 250 dollars to spend on lunch for the month. Salad and a drink are $2 and Burgers are $6. What is the largest number of salad that Joe could afford to purchase in one month? What is the largest number of burgers Joe could afford to purchase in one month?

A Recent College Graduate Is Saving To Buy A Home, And He Expects That

A recent college graduate is saving to buy a home, and he expects that he will need 52,000 for a downpayment. If he plans to deposit 500$ per month in an account that earns interest at a rate of 12% per year, compounded monthly, how long will it take him to reach 52,000

Explain How A Market Failure Can Arise Due To Non-rival Consumption And Non-excludability

Explain how a market failure can arise due to non-rival consumption and non-excludability

One Of The Difficulties With Government Getting Involved With Free Markets (such As Rent

One of the difficulties with government getting involved with free markets (such as rent control) is that:

A Physician Has Been Providing Medical Services At A Fee For $100 Per Patient

A physician has been providing medical services at a fee for $100 per patient and can see 30 patients per day. However, sickness in this community has been so vicious that the number of patients attempting to visit the physician exceeds 60. You will find below four different means of distributing the physician’s services to the sick patients. Indicate your answer to each of the 4 options with one of the possible answers and explain your reasoning for each option.

Which Could Be Considered A Good Reason To Take A Command Approach To The

Which could be considered a good reason to take a command approach to the allocation (who gets it) of a service? a. It is commonly agreed that everyone should have access to this service. b. Private industry would make tremendous profits on this service. c. This service is easily provided by many companies. d. The workers who provide this service are underpaid.

Question 1 Monty Is Planning A Trip To Melbourne, And Has Decided To Purchase

Question 1 Monty is planning a trip to Melbourne, and has decided to purchase a return air-ticket for $2,500 and a carry-on bag for $300 from the travel shop next door. However, his friend tells him that he would be able to buy the same air-ticket from a travel shop in Geela Mall for $2,350 and the same carry-on bag for only $260 from Luney Mall (located in the other side of town from Geela Mall). Suppose Monty lives equi-distant from either mall and calculates that his total costs of going to and from either mall is $50. Based on this information, Monty thinks that he should buy the carry- on bag from Luney Mall, but buy the air-ticket from the travel shop next door. Do you agree with Monty? Why, or why not? Explain your answer with reference to a principle of economics.

According To The Circular Flow Model, How Would A Sustained Increase In Unemployment Affect

According to the circular flow model, how would a sustained increase in unemployment affect inflation? a. It would result in slowing demand for products and rising inflation. b. It would result in falling wages and rising inflation. c. It would result in slowing demand for products and falling inflation. d. It would result in rising wages and falling inflation.

Question 2 Varsity Catering Company Is Licensed To Manage The Cafeterias For All Colleges

Question 2 Varsity Catering Company is licensed to manage the cafeterias for all colleges in the state of Unitas. There are only two colleges (Unitas East and Unitas West) – both of which offer equal quality, scope, and cost of education – therefore, student enrolment is evenly distributed between the two colleges. The only difference between the colleges are their meal plans. The meal plan for each college is as follows: Unitas East offers a meal plan that allows students eat as much as they like for $700 per semester. The average student there eats 100 kg of food per semester. In Unitas West, students are required to purchase a set of meal coupons for $700 which entitles them to eat 100 kg of food per semester. If a student eats more than 100 kg, he/she pays $7 for each additional kg; if the student eats less, he/she will be refunded $7 per kg. If all college students have the same preference for food, for which college would Varsity Catering Company have to prepare more food, on average? Explain your answer with reference to a principle of economics.

In Singapore, Over 80% Of The Population Lives In Housing Run By The Housing

In Singapore, over 80% of the population lives in housing run by the Housing and Development Board (HDB). HDB is a part of the Ministry of National Development. HDB sells housing to citizens as long as they are over 21 and have a family. Owners are able to resell their HDB homes to whomever they please. Private-built homes are also available, but can be be twice the cost of HDB homes. Based on this, how would you assess the economic approach to Housing in Singapore? a. The approach is mixed with both market and command provisioning of housing, but the allocation of the homes is mostly a market approach. b. The approach is command for both provisioning the housing and the allocation of the housing. c. The approach is market for both the provisioning and allocation of housing in Singapore. d. The approach is command for the provisioning since HDB is a government agency, but the allocation is a mostly market approach.

Question 3 Suppose That Two Economies (Vietland And Japanesia) Each Produce Only Two Goods

Question 3 Suppose that two economies (Vietland and Japanesia) each produce only two goods (Car and Soap). Vietland requires 1,000 work hours to produce a car, whereas Japanesia requires only 800 work hours to do the same. Japanesia can produce 0.01 ton of soap per hour, whereas Vietland can produce 0.05 ton of soap per hour. Each country has 1,000,000 work hours available per day. Initially, in the absence of trade, each nation chose to efficiently produce (and consume) 500 cars per day. Now, both nations agree to freely trade with each other at an exchange rate of 1 car for 10 tons of soap. Suppose that each nation fully specialises in the good in which it has comparative advantage. If each nation still chooses to consume 500 cars per day, what is each nation’s gains from trade in terms of soap? Explain in detail, and illustrate your answer in a diagram.

Amy Is A Skilled Toy Maker Who Is Able To Produce Both Boats And

Amy is a skilled toy maker who is able to produce both boats and balls. She has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of her time. Choice Hours Producing Produced (Boats) (Balls) (Boats) (Balls) A 8 0 4 0 B 6 2 3 10 C 4 4 2 16 D 2 6 1 19 E 0 8 0 20 Suppose Amy is currently using combination D, producing one boat per day. Her opportunity cost of producing a second boat per day is ___per day. Now, suppose Amy is currently using combination C, producing two boats per day. Her opportunity cost of producing a third boat per day is ___ per day. From the previous analysis, you can determine that as Amy increases her production of boats, her opportunity cost of producing one more boat (decreases/increases) . Suppose Amy buys a new tool that enables her to produce twice as many boats per hour as before, but it doesn’t affect her ability to produce balls. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more boats per hour, Amy’s opportunity cost of producing balls is (higher than/ lower than /the same as) it was previously.

1. Nancy Has A Utility Function 𝑈 = 5𝑐0.4𝑤0.6 Where C Denotes Packets Of

1. Nancy has a utility function 𝑈 = 5𝑐0.4𝑤0.6 where  c denotes packets of chocolates, w denotes bottles of wine. Based on the given information: a) Derive an expression for marginal utility of chocolates and wine. b) Derive an expression for marginal rate of substitution. 2. A small firm in Walu Bay has the production function 𝑌 = 4KL and can purchase capital and labour at $40 and $5 respectively. Given that the firm can spend maximum of $800, how many units of capital and labour should the firm use to produce the maximum possible output? 3. Tania consumes good X and good Y and has the following utility function, 𝑈 = 5𝑥0.2𝑦0.8 . Derive an expression for: a) Marginal utility of good X. b) Marginal utility of good Y. c) Slope of the utility function.

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