1. The specific factors model assumes two goods (cloth and food) are produced using labor, capital, and land as inputs. Labor is mobile between industries while capital and land are specific to each industry.
2. Under perfect competition, firms in each industry demand labor up to the point where the marginal revenue product of labor equals the prevailing wage rate.
3. The equilibrium allocation of labor across industries and the economy's production possibilities frontier are determined by equalizing wage rates in both industries.
The topic presented regarding trade and environmental agreements followed in the world. Some of the points shared are outdated but the purpose was to give an idea about the relation between trade and environment.
The topic presented regarding trade and environmental agreements followed in the world. Some of the points shared are outdated but the purpose was to give an idea about the relation between trade and environment.
Production Function is a statement of the relationship between a firm’s scarce resources (inputs) and the output that results from the use of these resources.
In mathematical terms, the PF can be expressed as:
Q= f (X1, X2…………Xk) where
Q=output, X1…………Xk=inputs used in the production process
cost of production / Chapter 6(pindyck)RAHUL SINHA
topics covered
•Production and firm
•The production function
•Short run versus Long run
•Production with one variable input(Labour)
•Average product
•Marginal product
•The slopes of the production curve
•Law of diminishing marginal returns
•Production with two variable inputs
•Isoquant
•Isoquant Maps
•Diminishing marginal returns
•Substitution among inputs
•Returns to scale
•Describing returns to scale
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
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how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
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What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
2. Objectives
1. Derive a typical PPF from production functions under diminishing
marginal return
2. Determine labor market equilibrium and equilibrium allocation of
labor
3. Understand how mobile factor will respond to price changes
3. Income Distributional Effect of Trade
• On the Ricardian model of trade, labor is only factor of production, so not only
that all countries gain from trade, but also that every individuals is made better
off as a result of international trade.
• In reality, trade creates winners and losers in an economy – Income distribution
effect of trade.
• Two main reasons why international trade has strong effects on the distribution
of income within a country:
– Short-run effect: Resources cannot move immediately or costlessly from one
industry to another. (Learning Unit 6 & 7).
– Long-run effect: Industries differ in the factors of production they demand.
(Learning Unit 8 & 9).
4. The Specific Factors Model
• Specific factors model: One factor is mobile among industries, while other factors
are not (immobile or specific to a particular industry).
– It allows trade to affect income distribution.
• Assumptions of the model:
– Two goods: cloth and food.
– Three factors of production: labor (L), capital (K) and land (T for terrain).
Cloth produced using capital and labor (but not land).
Food produced using land and labor (but not capital).
Labor is a mobile factor that can move between sectors.
Land and capital are both specific factors used only in the production of
one good.
– Perfect competition prevails in all markets.
5. Production Functions
• The production function for cloth gives the quantity of cloth that can be produced
given any input of capital and labor:
QC = QC(K, LC)
– QC is the output of cloth, K is the capital stock, LC is the labor force employed
in cloth
• The production function for food gives the quantity of food that can be
produced given any input of land and labor:
QF = QF(T, LF)
– QF is the output of food, T is the supply of land, LF is the labor force
employed in food
6. Production Function - Diagram
• Output (Qc) is an increasing function of
variable input (Lc).
– The more labor employed in the
production of cloth, the larger the
output.
• The curve gets flatter as level of
employment increases.
– each successive person-hour
increases output by less than the
previous one
7. Marginal Product of Labor
• Marginal product of labor: the increase in output that corresponds to an extra
unit of labor.
• Law of diminishing marginal returns
– Marginal produce of labor decreases as level of employment increases.
– Adding one worker to the production process (without increasing the amount
of capital) means that each worker has less capital to work with.
– Therefore, each additional unit of labor adds less output than the last.
8. Marginal Product of Labor - Diagram
• The marginal product of labor (MPLc) is a
decreasing function of labor input (Lc).
• The marginal product of labor is equal to
the slope of the production function.
MPLc = ΔQc/ ΔLc
ΔQc is a change in Qc and ΔLc is a change
in Lc.
Diminishing marginal return means the
production function getting flatter as labor
input increases
9. Mobile Resource and Production Possibilities
• Budget Constraint: For the economy as a whole, the total labor employed in cloth
and food must equal the total labor supply:
LC + LF = L
• The economy’s mix of output change as labor is shifted from one sector to the
other.
– When labor moves from food to cloth, food production falls while output of
cloth rises.
– Using all resources available and fully allocated to two industries, all possible
production mixes (Production possibilities) can be derived.
10. Four-Quadrant Diagram
• Use a four-quadrant diagram to
construct production possibilities
frontier.
– 1st (Upper right) quadrant indicates the
combinations of cloth and food that can be
produced.
– 2nd (Upper left) quadrant shows the
corresponding production function for food.
– 3rd (Lower left) quadrant indicates the
allocation of labor.
– 4th (Lower right) quadrant shows the
production function for cloth.
11. Deriving Production Possibilities
1. Choose an allocation of labor between cloth and
food industries along AA line in 3rd quadrant (AA2)
and determine quantities of labor in each industry
(LF
2 and LC
2).
2. Find a corresponding cloth output along the
production function of cloth in 4th quadrant (QC
2).
3. Find a corresponding food output along the
production function of food in 2nd quadrant (QF
2).
4. Find a combination of two outputs in 1st quadrant
(PP2) – This is one combination of outputs that the
economy can produce when it employs all labor.
5. Repeat Step 1 through 4 for various combinations
of labor in two industries (AA1 and AA3).
12. Marginal Rate of Transformation
• Marginal Rate of Transformation (MRTxy) of X for Y: The amount of Y
that a country must give up to produce each additional unit of X.
– MRTCF is an amount of food that a country must give up to produce each
additional unit of cloth.
• MRTxy is an opportunity cost of X.
– MRTCF is an opportunity cost of producing one more unit of cloth (amount of
food forgiven).
• MRTxy is a slope of PPF, when quantity of X is measured along the
horizontal axis and quantity of Y measured along the vertical axis.
13. Marginal Rate of Transformation - Formula
• Marginal rate of transformation is equal to a ratio of marginal product
of labor in two industries.
MRTCF = MPLF/MPLC
MPLC = ΔQC/ΔLC
MPLF = ΔQF/ΔLF
ΔLF = - ΔLC (LF + LC =L)
MRTCF = ΔQF/ΔQC = (ΔQF/ΔLF)/(ΔQC/ΔLC) = MPLF/MPLC
14. Marginal Rate of Transformation and
Opportunity Cost
• An opportunity cost of producing one more unit is how many units of the other
goods given up to produce one more unit of output.
– To produce one more unit of cloth, cloth industry needs additional labor of
1/MPLC (= ΔLC/ΔQC: Unit labor requirement).
– This labor resource must be taken from the food industry.
– For each labor, its output will decrease by MPLF (= ΔQF/ΔLF).
– So, with 1/MPLC less labor, an output of food decreases by MPLF/MPLC (= MRTCF)
in order to produce one more unit of cloth (opportunity cost).
15. MRT, Unit Labor Requirement, and
Opportunity Cost
• MPL is a productivity of labor.
• MPL is an inverse of unit labor requirement (MPLC = 1/aLC).
• MRTCF = MPLF/MPLC = (1/aLF)/(1/aLC) = aLC/aLF.
• aLC/aLF is an opportunity cost of cloth in Ricardian model.
16. Specific Factors Model vs. Ricardian Model
• Ricardian model: PPF is a straight line because the unit labor
requirement is constant
– A straight line PPF means a constant opportunity cost.
• Specific factors model: PPF is curved because the unit labor requirement
increases as production increases due the diminishing marginal return.
– As it requires more labor to produce an additional output, it must take more
labor input from the other industry and the production of the other goods
decrease at increasing rate, that means, increasing opportunity cost.
– Opportunity cost of cloth in terms of food is the slope of the production
possibilities frontier – the slope becomes steeper as an economy produces more
cloth.
17. Slope of PPF
• PPF of Specific Factor model is bowed out.
– As its production of cloth increases, PPF becomes steeper, and MRTCF
increases.
• Because of diminishing marginal return,
– QC LC & LF↓ MPLC↓ & MPLF MRTCF
18. Labor Allocation
• How much labor is employed in each sector?
– Need to look at supply and demand in the labor market.
• Demand for labor:
– In each sector, employers will maximize profits by demanding labor up to the
point where the value produced by an additional hour equals the marginal
cost of employing a worker for that hour.
19. Marginal Revenue Product
• Marginal revenue product (MRP): additional revenue brought by
hiring an additional hour of labor
MRP = MPL x P
Where MPL is a marginal product of labor and P is a price of output.
– MPL measures a quantity of output produced by one more unit of labor
hired.
– By selling MPL units of output at price of P, a firm will earn MPL x P of
revenue.
20. Labor Demand by Profit-Maximizing Firm
• Marginal revenue of labor: additional revenue brought by hiring an
additional hour of labor
MRP
• Marginal cost of labor: additional cost of hiring an additional hour of
labor
w (wage rate)
• A profit maximizing firm hires up to labor hours where MR = MC
MPL x P = w
21. Demand for Labor
• Marginal Revenue Product (MRP)
curve is a derived demand curve for
labor input.
– MRPC = MPLC x PC is a demand for
labor in Cloth sector where PC is a
price of cloth
– MRPF = MPLF x PF is a demand for
labor in food sector where PF is a
price food
• At wage rate of w1, a profit –
maximizing firm hires (demands) Lc
1
hours of labor.
22. Demand for Labor in Two Markets
• A country has a fixed quantity of labor (L) and
must allocate in two sectors.
LC + LF = L
• The horizontal axis represents the total labor
supply L.
• The demand for labor in the cloth sector and a
quantity of labor allocated in cloth sector (LC) are
measured from the left.
• The demand for labor in the food sector and a
quantity of labor allocated in food sector (LF) are
measured from the right.
23. Allocation of Labor in Two Markets
• A profit maximizing firm hires up to labor hours
in the cloth sector where
MPLC x PC = wC
• A profit maximizing firm hires up to labor hours
in the food sector where
MPLF x PF = wF
• At equilibrium, the wage rates are same in the
two sectors:
MPLC x PC = MPLF x PF = w
• Where the labor demand curves intersect gives
the equilibrium wage and allocation of labor
between the two sectors.
24. Adjustment of Labor Allocation
• The two sectors must pay the same wage because
labor can move between sectors.
• If an economy allocate labor too few in cloth sector
and too much in food sector,
• then MPLC x PC > MPLF x PF,
• the wage is higher in the cloth sector than in food
sector (wC > wF), so workers will move from food
sector to cloth sector.
• As labor moves from food sector to cloth sector, MPL
in cloth sector decreases and MPL of food sector
increases, so the wage rate decreases in cloth sector
and increases in food sector until the wages become
equal.
wC
wF
25. Relative Prices at Equilibrium
• Equilibrium condition in labor market:
MPLC x PC = MPLF x PF
implies that the marginal rate of transformation must be equal to
relative prices:
MRTCF = MPLF/MPLC = PC/PF
• At equilibrium, the slope of production possibility frontier must be
equal to relative price of cloth.
26. Production Combination and Labor Allocation
• The economy produces at the point
on its production possibility frontier
(PP) where the slope of that frontier
equals minus the relative price of
cloth.
• The point of PPF corresponds to the
equilibrium point in labor market
(equilibrium allocation of labor).
27. Change in Prices
• When a country engages in trade, a relative price of goods will
change.
• What happens to the allocation of labor and the distribution of
income when the prices of food and cloth change?
• Two cases:
1. An equal proportional change in prices (No change in relative price)
2. A change in relative prices
28. Equal Proportional Change in Prices
When both prices change in the same proportion,
no real changes occur.
• The labor demand curves in cloth and food both
shift up in proportion to the rise in PC from PC
1 to
PC
2 and the rise in PF from PF
1 to PF
2.
• The wage rate rises in the same proportion, from
w1 to w2, but the allocation of labor between the
two sectors does not change.
• The wage rate (w) rises in the same proportion
as the prices, so real wages (i.e., the ratios of the
wage rate to the prices of goods) are unaffected.
29. Change in Relative Price on Labor Allocation
• When only PC rises, labor shifts from the food
sector to the cloth sector and the output of
cloth rises while that of food falls.
• The wage rate (w) does not rise as much as PC.
When PC rises by 7%, the cloth labor demand
curve (MRP = PC x MPLC) rises in proportion to
the 7 percent increase in PC, but the wage rate
rises less than 7% since cloth employment
increases and thus the marginal product of
labor in that sector falls, so MRP increases by
less than PC increase.
30. Change in Relative Price on Production
When only PC rises,
• The relative price (PC/PF) rises – PPF
becomes steeper.
• Production of cloth (QC) increases, while
production of food (QF) decreases as a
country allocate more labor in cloth sector
and less in food sector.
• The production point moves from 1 to 2
along the PPF corresponding to movement
from Equilibrium point 1 to Equilibrium
point 2 in labor market.
31. Relative Supply in Specific Factors Model
• As relative price of cloth (PC/PF)
increases, the output of cloth (QC) rises
and the output of food (QF) falls.
• The relative quantity of cloth (QC/QF) also
increases.
• The relative supply curve of cloth is
upward-sloping.
• Since outputs of two goods change
gradually along PPF, the relative supply
curve is a smooth upward-sloping curve.
32. Determination of Relative Prices
• The equilibrium relative quantity
of cloth (QC/QF) and equilibrium
relative price of cloth (PC/PF) are
determined by an interaction of
relative supply (RS) and relative
demand (RD).
33. Disclaimer
Please do not copy, modify, or distribute
this presentation
without author’s consent.
This presentation was created and owned
by
Dr. Ryoichi Sakano
North Carolina A&T State University
Disclaimer
Please do not copy, modify, or distribute
this presentation
without author’s consent.
This presentation was created and owned
by
Dr. Ryoichi Sakano
North Carolina A&T State University