Version EN - EX1 Adam Smith

Practical case: instructions

Let's suppose that:

• Six countries (i = Japan, Uzbekistan, United Kingdom, France, Switzerland, United States) trade with each other two goods (k = agricultural products, consumer electronics).

• Each country has only one factor of production (L, labor). This factor is perfectly mobile between the two sectors within the same economy but immobile internationally.
• The amount of labor available in each country i is: :

We denote ai k as the amount of labor needed to produce one unit of good "k" in country "i".Each ai k below is called the "input-output coefficient".You are provided with the following information:

Lj = 1 200 Lo = 850 Lru = 580 LF = 860 Ls = 150 LUSA = 3 900

aJpa = 4 aRUpa = 0,8 aSpa = 0,5aJegp = 1,2 aRUegp = 4 aSegp = 5aOpa = 1 aFpa = 1,5 aUSApa = 1aOegp = 3,5 aFegp = 2,8 aUSAegp = 3