Please explain WHY that’s the point of question here . Explain and give more det
ID: 1143036 • Letter: P
Question
Please explain WHY that’s the point of question here . Explain and give more details when you choiceKindly only answer if you are a real economist, and sure about your answers . Because I’m sick of people posting random and waste my questions credit !
Thank you ! Kindly only answer if you are a real economist, and sure about your answers . Because I’m sick of people posting random and waste my questions credit !
Thank you !
The graphs below show the production possibilities curves for the U.S. and Canada, which both produce cars and wheat. U.S. Cars per day 14 Canadian Cars per day
Explanation / Answer
answer:
Gravity model of international trade: the was given by walter Isard (1954). It explains the bilateral trade of goods and investments etc. generally it uses GDP measurements and the distance between trading units to measure the trade flows. Bilateral trade means trade between two countries. Gravity model is also used to analyse the effect of different trade agreements, organizations, treaties and alliances etc. on the trade flow.
answer: 15 The gravity model offers a logical explanation for the fact that:
Intra-European Union trade exceeds international trade by the European Union.
Because it explains the efficiency of trade among European union members and the international trade of European union. As explained above gravity model analyses the trade flow of organizations and European Union is an political and economic organization of European countries and it encourages trade among member countries.
* the other options given in the question does not fit to the explanation of gravity model.
answer: 16 The gravity model suggests that over time
The value of trade between two countries will be proportional to the product of the two countries' GDP
The model measures the trade flows between countries on the basis of their economic dimensions; eg. GDP and their distance. It does not measure whether trade will increase or decrease.
answer: 17 The gravity model explains why:
Trade between Sweden and Germany exceeds that between Sweden and Spain.
answer: 18 The labour theory of value:
Says that the price of a good is determined by the amount of labour required to produce it
The Labor theory of value explains that the value of a good is determined by the number of labour hours used to produce the good
answer: 19 Given constant returns to scale between labour and output, if it takes 1 hour to make 10 yards of cloth, then 100 yards of cloth can be made in:
A) 10 hours
A constant return to scale means a proportional change in inputs (factors; labour) will result in the same proportional change in output for example of input increases by 10 % than the output will also increase by 10 %.
Here the proportion is 1:10 and every another hour will produce 10 yards of cloth so it will take 10 hours to produce 100 yards of cloth
**I have given the highlights of gravity model it will help you to understand the answers.
Hope it will help you.
Thank you