Assume that production exhibits increasing opportunity costs

Question # 00119833 Posted By: solutionshere Updated on: 10/18/2015 11:54 AM Due on: 11/17/2015
Subject Economics Topic General Economics Tutorials:
Question
Dot Image
Microsoft Word - HW2-i

Assume that production exhibits increasing opportunity costs. Australia is land abundant and India is labor abundant. Wheat is land intensive relative to textiles.

a) Graphically demonstrate the pre-trade and post-trade equilibrium in Australia. Note: Please put wheat in the x-axis.
It is not enough to draw the diagram for full credit. Explain why you are have different prices in the two countries in autarky.

b) Graphically demonstrate the pre-trade and post-trade equilibrium in India. Find and label its trade triangle.

Note: Please put wheat in the x-axis.
It is not enough to draw the diagram for full credit. Explain why you are have different prices in the two countries in autarky.

c) Which factors gain and which factors lose when trade arises between these two countries? Explain carefully.


Dot Image
Tutorials for this Question
  1. Tutorial # 00114324 Posted By: solutionshere Posted on: 10/18/2015 11:54 AM
    Puchased By: 3
    Tutorial Preview
    opportunity costs. Australia is land ...
    Attachments
    india.docx (29.93 KB)
    Recent Feedback
    Rated By Feedback Comments Rated On
    bo...96 Rating Great quality and professional work 05/29/2019

Great! We have found the solution of this question!

Whatsapp Lisa