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What happens to the producer budget or isocost line? What will happen to the equilibrium level of output because of this change in factor prices?
What would be the shape of the production-possibilities frontier, assuming constant returns to scale in both industries?
What should happen to the demand for labor and the demand for capital as this movement takes place? What will happen to relative factor prices?
Explain how producers would respond, using the isocost/isoquant framework. What would happen to the capital/labor ratio in production?
Indicate the equilibrium production and consumption point in autarky, using a PPF and a community. What must occur for this country to gain from trade?
Why is it possible for it to gain from trade if the rate of unemployment remains approximately the same?
What general conditions must hold for one to be able to use community indifference curve to well-being in country and demonstrate gain from international trade?
Ms. Jones, one of your neighbors, spends the majority of her income on food. How would you respond to Ms. Jones?
Discuss several economic events that would increase a country's willingness to trade.
In the offer curve analysis, why must an excess supply of one good be associated with an excess demand for the other good?
What conceptually would happen to Iraq's terms of trade and volume of trade? Illustrate and explain your answer using offer curves.
Describe the likely shapes of the offer curves of the importing countries-shapes that enabled the OPEC countries to pursue their trade strategy successfully.
Calculate the commodity terms of trade and the income terms of trade for this country for 2010. Interpret your results.
If the K/land ratio for Belgium is higher than that for France, what kind of products might Belgium export to France? Why?
What impact would the threat of imports have on a monopolist who had never before been faced with foreign competition?
Explain why you might expect to see certain capital owners and labor groups arguing against expanding trade in a capital-abundant country.
Complete factor price equalization cannot be achieved in the presence of transportation costs. Agree? Disagree? Explain.
Even though their relative factor abundances differ widely. What might explain this apparent contradiction of the Heckscher-Ohlin model?
How might the existence of factor-intensity reversals be a reason for the Leontief paradox? How might the existence of demand reversal?
How do you explain why many developing countries also have relatively high import barriers on labor-intensive goods?
Build a case against the view that increasing openness of the U.S. economy has been the primary factor causing increased income inequality in recent decades.
Explain what the issue or policy is and the approach you expect to take in analysing it. Include three relevant references in the proposal.
Explain, using the IS/LM/BP model, how a rise in the expected appreciation of the foreign currency can lead to an increase in domestic interest rates.
Why does monetary policy get a boost from the external sector under a flexible-rate system?
Under what capital mobility conditions is fiscal policy totally ineffective in influencing income? Explain why this result occurs.