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Economics

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1.Heckscher-Ohlin Model: a) (2pts) State the Hecksher-Ohlin Theorem b) (2pts) State the Stopler-Samuelson Theorem c) (6pts) Use the following Numerical Example to prove the Stopler-Samuelson Theorem: Suppose the following for the production of Steel Sales Revenue = Ps*Qs= $250 Payments to labor =w*Ls=$100 Payments to capital =R*Ks=$150 Suppose the following for the production of Coats Sales Revenue = Pc*Qc=$250 Payments to labor =w*Lc=$150 Payment to capital = R*Kc=$100 Price of Coats increases by 20% and the Price of Steel stays the same.

2. Suppose a zero coupon security has a face value of $1000 and a maturity of 5 yea 1f the return on comparable securities is 6%, calculate the market price of this security, years, a securities ). interest payments Assuming that the interest coupon payment. 2. Suppose a coupon security has a face value of $1000, a maturity of 4 years, coupon rate of 4% and a vield to maturity of 3% (return on comparable s are made semi-annally, calculate the following: A. The value of the col B. The number of payments received by holders of this security and the value of each payment. C. Based on your answer to B, calculate the present value of each of one of the payment received by holders of this security. D. Based on your ansver to C, calculate the market price of the security.