bo International Trade Around the WorldO Macmillan LearningChina is the world's largest exporter of goods. However,some antiglobalization activists argue that importing goodsfrom China leads to the exploitation of Chinese workers.Suppose the accompanying graph illustrates the labor supplyand labor demand curves for Chinese workers.a. Place point A at the initial market equilibrium.b. Move the appropriate curve or curves to illustrate whatwould happen if all U.S. manufacturers quit having theirproducts made in China.c. Place point B at the new market equilibrium after U.Smanufacturers quit having their products made in China.d. As a result of U.S. manufacturers leaving China,wages in ChinaandChinese workers are employed.Wage rate ($ per hour)Labor (quantity of workers)Labor SupplyLabor Demand

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Answered: bo International Trade Around the World…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 13P

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a. f You work for the U.S. president and are tasked with understanding the effect of population aging in China on trade between China and the U.S. You are told that you can assume that China and the U.S. trade a continuum of goods produced with only labor in both countries. Markets are perfectly competitive and the unit labor requirements differ across goods and countries. Use a suitable diagram to illustrate the effect of a decline in labor L in China on a) the set of goods made in China; b) the relative (nominal) wage in the two countries. Explain the intuition behind your findings.
The nation of Ectenia has 20 competitive appleorchards, all of which sell apples at the world priceof $2 per apple. The following equations describethe production function and the marginal product oflabor in each orchard:100100 2 ,2 5 25 2Q L LMPL Lwhere Q is the number of apples produced in a day,L is the number of workers, and MPL is the marginalproduct of labor.a. What is each orchard’s labor demand as a functionof the daily wage W? What is the market’s labordemand?b. Ectenia has 200 workers who supply their laborinelastically. Solve for the wage W. How manyworkers does each orchard hire? How much profitdoes each orchard owner make?c. Calculate what happens to the income of workersand orchard owners if the world price doubles to$4 per apple.d. Now suppose that the price is back at $2 perapple but a hurricane destroys half the orchards.Calculate how the hurricane affects the income ofeach worker and of each remaining orchard owner.What happens to the income of Ectenia as a whole?
Recentily, Swedish companies have outsourcad manufacturing labor previously performad by Swedish workers at $22 per hour to U.S. workers who receive a wage rate of $11 per hour. All of the following will be the effacts of Swedish manufacturing-labor outsourcing except OA U.S. wages will increase. OB. Swedish wages and employment will tal. OC. Swedish wages will rise and employment will fal. OD. U.S. employment will increase.
Consider the following weekly production possibilities of bagpipes and accordions in Poland and Scotland: Scotland Poland Bagpipes 50 75 Accordions 25 150 a) What is each country's opportunity cost of producing bagpipes and accordions? If the countries could, should they trade? b) What is the possible range of terms of trade between Poland and Scotland? 5. Define the marginal revenue product of labour. Explain two factors that could cause the marginal revenue product curve of labour to shift to the right. 6. Under what conditions does an oligopoly market result in the same outcome as monopoly? What does this imply for the oligopoly's long-run profits?
The nation of Ectcnia has 2.0 competitive apple or--chards, all of which sell apples at the world price of$2 per apple. 11,c following equations describe theproduction function and the marginal product of laborin each orchard:Q =IOOL - L2Ml'L = 100 - U,where Q is the number of apples produced in a day,Lis the number of workers, and MPL is the marginalproduct of labcr.a. What is each orchard's labor demand as a functionof the daily wage W? What is the mar ket's labordemand?b. &:tenia has 200 workers who supply their labcrinelastically. Solve for the '""gc W. How manyworkers docs each orchard hire? How much profitdocs each orchard owner make?c. Calculate what happens to the inoome of workersand orchard owners if the world price do ubles lo$4 per a pple.d. Now suppose the price is back a l $2 per apple,but a hurricane d estroys hall the orchards. Calcu•late how the hurricane affects the income of eachworker and of each remaining orchard owner.Wl,at happens to the income of Ectcnia as…
What is the difference between a free trade association, a common market, and an economic union?
Why would division of labor without trade not work?
The table below lists the labor requirements for producing USB cables and AC adapters. Labor Hours Needed to Make a(n) USB cable AC adapter West Virginia Kentucky 15 Which of the following are true? O West Virginia has an absolute advantage in producing USB cables O West Virginia has an absolute advantage in producing AC adapters O West Virginia has a comparative advantage in producing USB cables O West Virginia has a comparative advantage in producing AC adapters
Suppose that the price of sedans in the previous graph increases from $24,000 to $29,000 per car. This would cause the sedans to increase, which is reflected on the graph by a the supply curve. Suppose a technological improvement increases the speed with which robots can attach bolts to cars from 2,500 bolts per hour to 3,000 bolts per hour. Assuming that the wage rate remains the same, this would cause a the supply curve. This is because the technological improvement makes cars
Consider the following diagram representing the labor market in a given Country, with foreigners willing to supply labor at $100'000. Suppose that the government allows 85'000 foreign workers to enter the country. What happens to the equilibrium wage (in the short run)? W S 120'000 100'000 30'000 O It will be greater than 120'000 It will be less than 100'000 O It will be equal to 100'000 O It will be greater than 100'000 70'000 D
Why is the scientific revolution an insufficient explanation for the Industrial Revolution? The scientific revolution was stopped by religious fanatics. Scientific discovery is unrelated to economic progress. The early advances of the Industrial Revolution were not reliant on scientific breakthroughs. The scientific revolution, while a step forward, still got most things wrong.
Equilibrium in the lobour market depends on the demand for labour and the supply of labour. Graphically demonstrate how the supply of labour in the US is affected by th eincrease in the labour force resulting from Mexican immigrants. What other factors tht can cause the labour supply curves to shift?

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