- Can I Get Some Detailed Explanation For This Question 1 (186.94 KiB) Viewed 41 times
Can i get some detailed explanation for this question?
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Can i get some detailed explanation for this question?
Can i get some detailed explanation for this question?
Q1. Following questions refer to trade between two economies; Korea and EU where there are production factor, and the production technology in each economy can be completely described by the following unit labor requirements: Unit labor requirement (the amount of labor required to produce one unit of each product) Korea EU X Y 1 units of labor 4 units of labor 2 units of labor 4 units of labor with Korea having 100 units of labor and EU having 300 units of labor. Consumers in each economy have the same preference, represented by the following utility function U(x, y)=xy-a where x denotes the consumption level of X and y denotes the consumption level of Y with a=1/2. This implies that the relative demand for X (x/y) is a function of p./p,, where p, and p, denote the price of X and the price of Y, respectively. Graph the world relative demand curve for EU labor (RD) and the world relative supply curve (RS) for EU labor in Graph II-1 below, and identify the equilibrium relative wage of Country EU workers (w/w), where we and wo represent the wage (per labor unit) of EU and Korean workers, respectively. Briefly discuss your derivation of the relative demand function for EU's workers. wto LEU 0 Ko The equilibrium relative wage (wEU/wko) = ( Brief discussion of derivation of the relative demand function for EU workers: )
Q1. Following questions refer to trade between two economies; Korea and EU where there are production factor, and the production technology in each economy can be completely described by the following unit labor requirements: Unit labor requirement (the amount of labor required to produce one unit of each product) Korea EU X Y 1 units of labor 4 units of labor 2 units of labor 4 units of labor with Korea having 100 units of labor and EU having 300 units of labor. Consumers in each economy have the same preference, represented by the following utility function U(x, y)=xy-a where x denotes the consumption level of X and y denotes the consumption level of Y with a=1/2. This implies that the relative demand for X (x/y) is a function of p./p,, where p, and p, denote the price of X and the price of Y, respectively. Graph the world relative demand curve for EU labor (RD) and the world relative supply curve (RS) for EU labor in Graph II-1 below, and identify the equilibrium relative wage of Country EU workers (w/w), where we and wo represent the wage (per labor unit) of EU and Korean workers, respectively. Briefly discuss your derivation of the relative demand function for EU's workers. wto LEU 0 Ko The equilibrium relative wage (wEU/wko) = ( Brief discussion of derivation of the relative demand function for EU workers: )