If anbody can help thanks! Output per Labor-Day Russia China Steel Tin 10 5 3 6
ID: 1212149 • Letter: I
Question
If anbody can help thanks!
Output per Labor-Day
Russia
China
Steel
Tin
10
5
3
6
a) Fill in the table below, assuming that the wage rate in Russia, expressed in dollars, is $10 per day, and that the wage rate in China, expressed in dollars, is $6 per day.
Price of Steel and China
Russia
China
Price of Steel
Price of Tin
___
___
___
___
b) Based on your table values from part (a), does the nation with the lower wage always have the lower price?
c) Other than wages, what determines prices?
d) Assume now that the wage rate in Russia is $10 per day, as before, but the wage rate in China is $1. Could these be equilibrium wage rates?
Russia
China
Steel
Tin
10
5
3
6
Explanation / Answer
Using the relation P*MPL = W , P = MPL/W
here P = Price, MPL = Marginal Product of Labour, and W = Wage
Price of Steel and China
Russia
China
Price of Steel
Price of Tin
_1__
0.5___
0.5___
_1__
B. No, Nation with lower wage doesn't always have lower price..
C. other than wages, the pproductivity of abour also determines prices.
D. No, these won't be equilibrium wage rates.
If you don't understand anything, then comment, I will revert back on the same.
And If you liked the answer then please do review the same. Thanks :)
Russia
China
Price of Steel
Price of Tin
_1__
0.5___
0.5___
_1__