Assignment: Global Economics
A home country has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Graph Home's production possibility frontier.
o What is the opportunity cost of apples in terms of bananas?
o In the absence of trade, what would be the price of apples in terms of bananas?
o What are the economic reasons?
Now assume that we have a two factor economy (Heckscher- Ohlin)
Can you explain why the production possibility frontier in the two factor model, the Red line is kinked?
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.