Economics
posted by John .
B. Suppose there are two goods, Cloth and Food, and two factors of production, labour
and capital. Suppose that the production function for each good is "homothetic". Put capital K in the vertical axis and labour L in the horizontal axis. For Cloth production, for any ray from the origin that has a slope of x, the slope of a tangent of an isoquant at a point which crosses this particular ray is 3x. For Food production, for any ray
from the origin that has a slope of 3y, the slope of a tangent of an isoquant at a point which crosses this particular ray is 2y.
(a) Draw the isoquants for the production of Cloth and of Food.
(b) Draw the two curves relating the capital to labour ratio (K/L in the horizontal axis) with the wage to rental ratio (w/r in the vertical axis) for the production of Cloth and for the production of Food. What can you say about the relative factor intensities of the two sectors?
(c) Find the capital to labour ratios for both Food and Cloth when w/r = 2 and
w/r = 4.
(d) Suppose that there are two countries, A and B that have the same technology described above for Cloth and Food. Before trade, Country A employs 10 units of K and 60 units of L in the Cloth industry. In the Food industry it employs 30 units of K and 40 units of L. Country B employs K = 20, L = 30 in the Cloth industry and K = 30, L = 10 in the Food industry. Determine the prices
w/r in the two countries before trade and the comparative advantage and the trade pattern.
Which group in A will oppose opening up trade and why?

Economics 
nips
i need answers
Respond to this Question
Similar Questions

Economics
In an economy where a unit of labour can produce either 1 unit of x or 4 units of y (or any linear combination of the two) and a unit of capital can produce either 4 units of x or 1 unit of y (or any linear combination of the two). … 
econ question
2 questions that im stuck on!!! 1. Suppose a firm has a production function Q = 3(squareroot)N, where N is labour. Suppose the wage is 3, and the price of the output 4. (a) Write the Firm profits (b) Calculate the firm optimal labour … 
economics
if production is Q=(a^c) min(K,L) where a>0, c>1, price of capital(r)=£10 and price of labour (w)= £10 what is the optimal combination of capital and labour? 
microeconomics
Describe the adjustments in the production possibilities curves in each of the following situations for the United States economy. You should use a graph of a production possibilities curve in your explanation of each scenario. The … 
Economics Help pls
Suppose you are given the following production function: , where y is output and K is capital. y= 60K + 20.3K2 K3 1.1 what is a production function, what is the real work application of such, and where would you source the data to … 
BusinessMs. Sue
Ms. Sue you know how yesterday you and I both worked on the natural resources, capitol, etc. Well I listed some things like cell phones etc. which were not connected with the production of an automobile. This is my assignment: List … 
Math (UBC)
Economists use production functions to describe how output of a system varies with another variable such as labour or capital. For example, the production function P(L) = 200L + 10L^2  L^3 goves the output of a system as a function … 
Math Calculus
Economists use production functions to describe how output of a system varies with another variable such as labour or capital. For example, the production function P(L) = 200L + 10L^2  L^3 goves the output of a system as a function … 
economic
Draw a production possibilities curve for a hypothetical economy producing capital good and consumer goods. Suppose a major technological breakthrough occurs I the capital goods industry and the new technology is widely adopted only … 
ecnometrics
The following regression equation is estimated as a production function for q based on a sample size of 30 observations In (Q)=1.37 + 0.632 in(Ki)+0.452 in(Li)+uhati (0.257) (0.219) R2=0.98 Cov(Bkhat,Bhat L)=0.055 And standard errors …