Econ 3HH3 Winter 2016 Home Assignment #3: Due to February 9th, 2016. Show all your calculations and explain all your answers 1.- (9 points). For this assignment, assume all the technologies are consistent with the models we have seen in class. The Kingdom of the North and the Iron Islands produce 2 goods, swords (S) and fish (F). Assume that ports (denoted by P) is a factor to the fish industry, and mines are a factor specific to swords (denoted M). Furthermore, assume White Walker labor (L) is freely mobile across sectors. Consider the Iron Islands. Holding constant the price of swords, suppose an increase in the price of fish of 75% and the decrease in the White Walker wage is 50%. Determine the impact of these changes on the real rentals on ports and mines by using information below (first you need to figure out the payments to all the factors): Swords: Sales revenue PSQS = 10 Payments to White Walker labor WL = 3 Fish: Sales revenue PFQF = 50 Payments to ports RpP = 15 https://www.coursehero.com/file/13314508/Home-Work-3-2016pdf/ This study resource was shared via CourseHero.com2. (1 point.) In the US, where land is cheap, the ratio of land to labor used in cattle raising is higher than that of land used in wheat growing. But in more crowded countries, where land is expensive and labor is cheap, it is common to raise cows by using less land and more labor than Americans use to grow wheat. Based on the HO model, can we still say that raising cattle is land intensive compared with farming wheat? Why or why not? https://www.coursehero.com/file/13314508/Home-Work-3-2016pdf/ This study resource was shared via CourseHero.com Powered by TCPDF (www.tcpdf.org)