Leontief paradox theory Rating:
Hydrogen peroxide is a chemical compound made up of two hydrogen atoms and two oxygen atoms. It is a pale blue liquid that is often used as a disinfectant or bleach, and it can be found in many household cleaning products.
One interesting experiment that can be done with hydrogen peroxide is the potato experiment. This experiment involves cutting a potato into thin slices and soaking them in a solution of hydrogen peroxide for a period of time.
To perform the experiment, you will need the following materials:
Hydrogen peroxide (3% concentration)
A plastic container or bowl
A knife or potato slicer
A timer or clock
To begin, slice the potato into thin rounds using the knife or potato slicer. You can cut the slices as thin or as thick as you like, but thinner slices will likely react faster to the hydrogen peroxide solution.
Next, fill the plastic container or bowl with enough hydrogen peroxide to cover the potato slices. Carefully place the potato slices into the solution and set a timer for 10 minutes.
As the potato slices soak in the hydrogen peroxide, you will begin to notice some bubbling and foaming. This is due to the release of oxygen gas as the hydrogen peroxide decomposes. The oxygen gas is what causes the bubbling and foaming, as it becomes trapped in the potato slices.
After 10 minutes, remove the potato slices from the solution and place them on a plate or paper towel to dry. As the potato slices dry, the oxygen gas will escape, and the bubbling and foaming will stop.
You may notice that the potato slices have changed color after soaking in the hydrogen peroxide solution. This is due to the bleaching effect of the hydrogen peroxide, which can lighten the natural color of the potato slices.
Overall, the potato experiment is a simple and fun way to demonstrate the decomposition of hydrogen peroxide and the release of oxygen gas. It is a great way to introduce students to the concept of chemical reactions and the properties of hydrogen peroxide.
LEONTIEF PARADOX THEORY OF INTERNATIONAL TRADE PDF
This is how general equilibrium theory of value explains prices of commodities and factors between different individuals in a region or a country. For example, product B is relatively more capital-intensive than the product A, if the ratio of capital to labor in the production of goods is more than the ratio of the same cost of production of the product A. It answers the following question: "If the relative price of labor-intensive goods changes, how will the relative price of the labor change in a labor abundant country, which produces these goods, as well as, if the relative price of capital abundant goods changes, how will the price of capital change in a capital abundant country? He failed to take into account the differences in capital durabilities in different industries. He developed input-output tables for sector analysis that estimated the impact a change in production of a good has on other industries and their inputs—establishing the interdependent relationships of economic sectors. On the opposite, the country may feel the necessity of importing it. Because of the complication of the multiple stages in the production of a good or service, only the final value of a good or service is included in the total output.
However, in her trade with the United States, the exports were capital-intensive and imports were labour-intensive. However, the inclusion of human capital could eliminate the paradox. Such situations make it difficult to assess the validity or otherwise of H-O theorem. Then apply the HO theory. As such, if input of US labour was adjusted that is, multiplied by a factor of three, US would be ranked as a labour-abundant country.
Another explanation for which Leontief has shown a certain understanding is connected with the two factor framework and the broad use of the term capital. . Recent efforts in international economics have attempted to refine the Heckscher-Ohlin model and test it on a wider range of empirical evidence. Therefore Singapore can be considered approximately five times more capital abundant. Analytical Deficiency: The reasoning used by Leontief has an analytical flaw in the sense that it is an application of a two-factor model to a multi-factor situation. The Leontief conclusion that in the international division of labour, the U.
That is, a factor which is found in abundance in a country will have a lower price and vice versa. As the over-pricing of labour and underpricing of capital cause factor-price distortion, there is likelihood that the labour-surplus and capital-scarce countries like India export capital-intensive goods and import labour-intensive goods. Many economists conducted Loentief type studies related to other countries. When comparing the relative factor intensities of sectors for which data was available, a questionable yet not entirely unreasonable method of comparing the export category with the corresponding labor category, and finding the capital output for each unit of labor employed. Ohlin in 30-s of XX century to clarify and supplement the key points of the comparative advantage theory and to formulate the concept of factors of production. Capital and natural resources are complementary in many fields of production.
This meant that the United States was not capital abundant, but labor abundant. It assumes that a commodity cloth is labour-intensive both in the U. When Leontief made his study, most competitive imports considered of crude oil, paper pulp, primary copper and lead, and metallic ores. Japan even though a labour-abundant country, imported labour-intensive goods like raw materials and exported capital-intensive goods such as automobiles, computers, T. If capital and the third factor land are substitutes but both are complementary with labour, it might be the case that import competing goods are capital intensive in the U. Abu Yousuf M Abdullah Contents Introduction3 The Leontief Paradox3 Paradoxes outside the US4 Introduction The Heckscher-Ohlin theory states that each country exports the commodity which uses its abundant factor intensively.
If human capital is included, the paradox gets eliminated. The United States exported the goods, whose production in other countries was impossible or inefficient due to the lower labor skill. ADVERTISEMENTS: It will be seen from Figure 23. Which of the following statements regarding openness of an economy and growth is TRUE? However, in practice, along with the growth of production and product diversification was an increase of marginal costs, leading Swedish economists to the conclusion of necessity to introduce the growth conditions for replacement cost relative costs into the model. His analysis became known as the Leontief Paradoxbecause it was the reverse of what was expected by the factor proportions theory. Excluding course final exams, content authored by Saylor Academy is available under a Saylor Academy®, Saylor. Leontief campaigned for broader and deeper developments in the area of quantitative data analysis throughout his career.
That can be one of the reasons for high capital-intensity of their exports, even though they are capital-scarce. It was used to classify students according to ability in the Paris school system. We also find that the two countries are closely linked economically, politically, and geographically, giving them high relative proportions of bilateral trade, and thus making them a worthwhile country pair to compare when testing the Heckscher-Ohlin Theorem. In this situation the countries will not gain from entering into trade with each other. However, some economists like H. The factor which is relatively abundant in a country will tend to have a lower price and the factor which is relatively scarce will tend to have a higher price.
Real Life Examples of the Leontif Paradox Assignment free sample
The value of output derived from a given stock of materials and human resources increases on account of research and development activity. Difference in Preferences or Demands for Goods: Against Hecksher-Ohlin theorem, it has also been pointed out that differences in tastes and preferences for goods or, to put it in other words, differences in pattern of demand also give rise to trade between the countries. However, in reality, they exported more laborintensive goods, and capital intensity of American imports exceeded exports by 30%. First, it rescued the theory of international trade from the grip of labour theory of value and based it on the general equilibrium theory of value according to which both demand and supply conditions determine the prices of goods and factors. Another explanation for which Leontief has shown a certain understanding is connected with the two factor framework and the broad use of the term capital. Vernon found that the U.