New answers tagged

1 vote

Factor changes in Melitz (2003) model

Let us assume that the labor supply increases. Below I list some of the consequences that occur in the model: Wage adjustment: An increase in labor supply typically leads to a decrease in wages due ...
4 votes

Does the Rybczynski theorem also hold in modern trade theory models?

The Rybczynski theorem is not directly applicable to the Melitz (2003) model, because the model the Rybczynski theorem is originating from, the Heckscher-Ohlin model, is built on different assumptions ...
2 votes

What is the economical perspective of the value of an egg globally if we take in some hypothetical considerations?

In economics there is phenomenon that we call the law of one price. Law of one price states that in absence of any transportation costs, market frictions and allowing for free trade a good has to have ...
  • 50.1k
0 votes

Trade and Opportunity Cost

Consider this allocation: Apple: $55$ hours on Phones, $15$ hours on Tablets. Samsung: All $70$ hours on Tablets. I leave it as an excercise for you to check it works. Initially what I thought was ...

Top 50 recent answers are included