国际经济学第九版英文课后答案 第7单元.doc

International Economics 9th EditionInstructors ManualCHAPTER 7ECONOMIC GROWTH AND INTERNATIONAL TRADEOUTLINE7.1 Introduction7.2 Growth of Factors of Production7.2a Labor Growth and Capital Accumulation Over Time7.2b The Rybczynski Theorem7.3 Technical Progress7.3a Neutral, Labor-Saving, and Capital-Saving Technical Progress7.3b Technical Progress and the Nations Production FrontierCase Study 7-1: Changes in Relative Resource Endowments of Various Countries and RegionsCase Study 7-2: Change in Capital-Labor Rations in Selected Countries7.4 Growth and Trade: The Small Country Case7.4a The Effects of Growth on Trade 7.4b Illustration of Factor Growth, Trade, and Welfare7.4c Technical Progress, Trade, and WelfareCase Study 7-3: Growth of Output per Worker from Capital Deepening, Technological Change, and Improvements in Efficiency7.5 Growth and Trade: The Large-Country Case7.5a Growth and the Nations Terms of Trade and Welfare7.5b Immiserizing Growth7.5c Illustration of Beneficial Growth and TradeCase Study 7-4: Growth, Trade, and the Giants of the Future7.6 Growth, Change in Tastes, and Trade in Both Nations7.6a Growth and Trade in Both Nations7.6b Change in Tastes and Trade in Both Nations Case Study 7-5: Change in the Revealed Comparative Advantage of Various Countries or RegionsCase Study 7-6: Growth, Trade, and Welfare in the Leading Industrial NationsAppendix:A7.1 Formal Proof of Rybczynski TheoremA7.2 Growth with Factor ImmobilityA7.3 Graphical Analysis of Hicksian Technical ProgressKey TermsComparative staticsAntitrade production and consumptionDynamic analysisNeutral production and consumptionBalanced growthNormal goodsRybczynski theoremInferior goodsLabor-saving technical progressTerms-of-trade effectCapital-saving technical progressWealth effectProtrade production and consumptionImmiserizing growth Lecture Guide1. This is not a core chapter and it is one of the most challenging chapters in international trade theory. It is included for more advanced students and for completeness. 2. If I were to cover this chapter, I would present two sections in each of three lectures. Time permitting, I would, otherwise cover Sections 1 and 2, paying special attention to the Rybczynski theorem. Answer to Problems 1. a) See Figure 1. b) See Figure 2 c) See Figure 3. 2. See Figure 4. 3. a) See Figure 5. b) See Figure 6. c) See Figure 7. 4. Compare Figure 5 to Figure 1. Compare Figure 6 to Figure 3. Note that the two production frontiers have the same vertical or Y intercept in Figure 6 but a different vertical or Y intercept in Figure 3. Compare Figure 7 to Figure 2. Note that the two production frontiers have the same horizontal or X intercept in Figure 7 but a different horizontal or X intercept in Figure 2. 5. See Figure 8 on page 66. 6. See Figure 9. 7. See Figure 10. 8. See Figure 11. 9. See Figure 12. 10. See Figure 13 on page 67.11. See Figure 14.12. See Figure 15.13. The United States has become the most competitive economy in the world since the early 1990s while the data in Table 7.3 refers to the 1965-1990 period.(672249735311ebc15638d963a355c36f.pdf)7-17 Dominick Salvatore14. The data in Table 7.4 seem to indicate that China had a comparative advantage in capital-intensive commodities and a comparative disadvantage in unskilled-labor intensive commodities in 1973. This was very likely due to the many trade restrictions and subsidies, which distorted the comparative advantage of China. Its true comparative advantage became evident by 1993 after China had started to liberalize its economy.App. 1a. See Figure 16. 1b. For production and consumption to actually occur at the new equilibrium point after the doubling of K in Nation 2, we must assume either than commodity X is inferior or that Nation 2 is too small to affect the relative commodity prices at which it trades. 1c. Px/Py must rise (i.e., Py/Px must fall) as a result of growth only. Px/Py will fall even more with trade.1. If the supply of capital increases in Nation 1 in the production of commodity Y only, the VMPLy curve shifts up, and w rises in both industries. Some labor shifts to the production of Y, the output of Y rises and the output of X falls, r falls, and Px/Py is likely to rise. 2. Capital investments tend to increase real wages because they raise the K/L ratio and the productivity of labor. Technical progress tends to increase K/L and real wages if it is L-saving and to reduce K/L and real wages if it is K-saving.Multiple-Choice Questions1. Dynamic factors in trade theory refer to changes in: a. factor endowmentsb. technologyc. tastes*d. all of the above2. Doubling the amount of L and K under constant returns to scale: a. doubles the output of the L-intensive commodityb. doubles the output of the K-intensive commodityc. leaves the shape of the production frontier unchanged*d. all of the above.3. Doubling only the amount of L available under constant returns to scale:a. less than doubles the output of the L-intensive commodity*b. more than doubles the output of the L-intensive commodityc. doubles the output of the K-intensive commodityd. leaves the output of the K-intensive commodity unchanged4. The Rybczynski theorem postulates that doubling L at constant relative commodity prices:a. doubles the output of the L-intensive commodity*b. reduces the output of the K-intensive commodityc. increases the output of both commoditiesd. any of the above5. Doubling L is likely to:a. increases the relative price of the L-intensive commodityb. reduces the relative price of the K-intensive commodity*c. reduces the relative price of the L-intensive commodityd. any of the above6. Technical progress that increases the productivity of L proportionately more than the productivity of K is called:*a. capital savingb. labor savingc. neutrald. any of the above7. A 50 percent productivity increase in the production of commodity Y:a. increases the output of commodity Y by 50 percentb. does not affect the output of Xc. shifts the production frontier in the Y direction only*d. any of the above8. Doubling L with trade in a small L-abundant nation:*a. reduces the nations social welfareb. reduces the nations terms of tradec. reduces the volume of traded. all of the above 9. Doubling L with trade in a large L-abundant nation:a. reduces the nations social welfareb. reduces the nations terms of tradec. reduces the volume of trade*d. all of the above 10. If, at unchanged terms of trade, a nation wants to trade more after growth, then the nations terms of trade can be expected to:*a. deteriorateb. improvec. remain unchangedd. any of the above11. A proportionately greater increase in the nations supply of labor than of capital is likely to result in a deterioration in the nations terms of trade if the nation exports:a. the K-intensive commodity*b. the L-intensive commodityc. either commodityd. both commodities 12. Technical progress in the nations export commodity:*a. may reduce the nations welfareb. will reduce the nations welfarec. will increase the nations welfared. leaves the nations welfare unchanged13. Doubling K with trade in a large L-abundant nation:a. increases the nations welfareb. improves the nations terms of tradec. reduces the volume of trade*d. all of the above14. An increase in tastes for the import commodity in both nations:a. reduces the volume of trade*b. increases the volume of tradec. leaves the volume of trade unchangedd. any of the above15. An increase in tastes of the import commodity of Nation A and export in B:*a. will reduce the terms of trade of Nation Ab. will increase the terms of trade of Nation Ac. will reduce the terms of trade of Nation Bd. any of the aboveADDITIONAL ESSAYS AND PROBLEMS FOR PART ONE 1. Assume that both the United States and Germany produce beef and computer chips with the following costs:United StatesGermany (dollars) (marks)Unit cost of beef (B)2 8 Unit cost of computer chips (C)1 2 a) What is the opportunity cost of beef (B) and computer chips (C) in each country?b) In which commodity does the United States have a comparative cost advantage?What about Germany?c) What is the range for mutually beneficial trade between the United States and Germany for each computer chip traded? d) How much would the United States and Germany gain if 1 unit of beef is exchanged for 3 chips?Ans. a) In the United States: the opportunity cost of one unit of beef is 2 chips; the opportunity cost of one chip is 1/2 unit of beef. In Germany: the opportunity cost of one unit of beef is 4 chips; the opportunity cost of one chip is 1/4 unit of beef. b) The United States has a comparative cost advantage in beef with respect to Germany, while Germany has a comparative cost advantage in computer chips. c) The range for mutually beneficial trade between the United States and Germany for each unit of beef that the United States exports is 2C 1B 4C d) Both the United States and Germany would gain 1 chip for each unit of beef traded.2. Given: (1) two nations (1 and 2) which have the same technology but different factor endowments and tastes, (2) two commodities (X and Y) produced under increasing costs conditions, and (3) no transportation costs, tariffs, or other obstructions to trade. Prove geometrically that mutually advantageous trade between the two nations is possible. Note: Your answer should show the autarky (no-trade) and free-trade points of production and consumption for each nation, the gains from trade of each nation, and express the equilibrium condition that should prevail when trade stops expanding.)Ans.: See Figure 1 on page 74. Nations 1 and 2 have different production possibilities curves and different community indifference maps. With these, they will usually end up with different relative commodity prices in autarky, thus making mutually beneficial trade possible. In the figure, Nation 1 produces and consumes at point A and Px/Py=PA in autarky, while Nation 2 produces and consumes at point A and Px/Py=PA. Since PA A since it involves more of both X and Y and lies on a higher community indifference curve. Nation 2 starts at A in production and consumption in autarky, moves to point B in production, and by exchanging BC of Y for CE of X reaches point Ein consumption (which exceeds A). At Px/Py=PB=PB, Nation 1 wants to export BC of X for CE of Y, while Nation 2 wants to export BC (=CE) of Y for CE (=BC) of X. Thus, PB=PB is the equilibrium relative commodity price because it clears both (the X and Y) markets. 3. Draw a figure showing: (1) in Panel A a nations demand and supply curve for A traded commodity and the nations excess supply of the commodity, (2) in Panel C the trade partners demand and supply curve for the same traded commodity and its excess demand for the commodity, and (3) in Panel B the supply and demand for the quantity traded of the commodity, its equilibrium price, and why a price above or below the equilibrium price will not persist. At any other price, QD QS, and P will change to P2.Ans. See Figure 2 on page 74. The equilibrium relative commodity price for commodity X (the traded commodityexported by Nation 1 and imported by Nation 2) is P2 and the equilibrium quantity of commodity X traded is Q2.4. a) Identify the conditions that may give rise to trade between two nations. b) What are some of the assumptions on which the Heckscher-Ohlin theory is based? c) What does this theory say about the pattern of trade and effect of trade on factor prices?Ans. a) Trade can be based on a difference in factor endowments, technology, or tastes between two nations. A difference either in factor endowments or technology results in a different production possibilities frontier for each nation, which, unless neutralized by a difference in tastes, leads to a difference in relative commodity priceand mutually beneficial trade. If two nations face increasing costs and have identical production possibilities frontiers but different tastes, there will also be a difference in relative commodity prices and the basis for mutually beneficial trade between the two nations. The difference in relative commodity prices is then translated into a difference in absolute commodity prices between the two nations, which is the immediate cause of trade. b) The Heckscher-Ohlin theory (sometimes referred to as the modern theory as opposed to the classical theory - of international trade) assumes that nations have the same tastes, use the same technology, face constant returns to scale (i.e., a given percentage increase in all inputs increases output by the same percentage) but differ widely in factor endowments. It also says that in the face of identical tastes or demand conditions, this difference in factor endowments will result in a difference in relative factor prices between nations, which in turn leads to a difference in relative commodity prices and trade. Thus, in the Heckscher-Ohlin theory, the international difference in supply conditions alone determines the pattern of trade. To be noted is that the two nations need not be identical in other respects in order for international trade to be based primarily on the difference in their factor endowments. c) The Heckscher-Ohlin theorem postulates that each nation will export the commodity intensive in its relatively abundant and cheap factor and import the commodity intensive in its relatively scarce and expensive factor. As an important corollary, it adds that under highly restrictive assumptions, trade will completely eliminate the pretrade relative and absolute differences in the price of homogeneous factors among nations. Under less restrictive and more usual conditions, however, trade will reduce, but not eliminate, the pretrade differences in relative and absolute factor prices among nations. In any event, the Heckscher-Ohlin theory does say something very useful on how trade affects factor prices and the distribution of income in each nation. Classical economists were practically silent on this point.5. consumers demand more of commodity X (the L-intensive commodity) and less of commodity Y (the K- intensive commodity). Suppose that Nation 1 is India, commodity X is textiles, and commodity Y is food. Starting from the no-trade equilibrium position and using the Heckscher-Ohlin model, trace the effect of this change in tastes on Indias (a) relative commodity prices and demand for food and textiles, (b) production of both commodities and factor prices, and (c) comparative advantage and volume of trade. (d) Do you expect international trade to lead to the complete equalization of relative commodity and factor prices between India and the United States? Why?Ans. a. The change in tastes can be visualized by a shift toward the textile axis in Indias indifference map in such a way that an indifference curve is tangent to the steeper segment of Indias production frontier (because of increasing opportunity costs) after the increase in demand for textiles. This will cause the pretrade relative commodity price of textiles to rise in India. b. The increase in the relative price of textiles will lead domestic producers in India to shift labor and capital from the production of food to the production of textiles. Since textiles are L-intensive in relation to food, the demand for labor and therefore the wage rate will rise in India. At the same time, as the demand for food falls, the demand for and thus the price of capital will fall. With labor becoming relative more expensive, producers in India will substitute capital for labor in the production of both textiles and food. Even with the rise in relative wages and in the relative price of textiles, India still remains the L-abundant and low-wage nation with respect to a nation such as the United States. However, the pretrade difference in the relative price of textiles between India and the United States is now somewhat smaller than before the change in tastes in India. As a result the volume of trade required to equalize relative commodity prices and hence factor prices is smaller than before. That is, India