国际经济学习题 (3).doc

Chapter 4Technology and International Income Distribution: The Ricardian Model23Chapter 4Technology and International IncomeDistribution: The Ricardian ModelnSuggested Answers to Textbook Questions1.The above diagram shows that the possible world outputs of food and clothing are given by the parallelogram ABCD. Even in the absence of trade it is possible that countries are on the locus ABC (for example if tastes are infinitely elastic and the same across countries). The menu of worst combinations is given by ABC.2.(a)If demand for good 2 decreases and the demand for the good produced abroad increases the price of good 2 will fall and the price of the foreign good will rise. This will lead to an increase in wages in the foreign country and a decrease in wages in the US. Production of good 3 will then not be profitable abroad and thus all good 3 production will shift to the US. Alternatively, it is possible that production of good 3 could still be shared between countries. In this case, there will be no change in prices. The ratio of the foreign to American wage will rise, however.(b)Fix the price of good 3 at $1. Since there is no change in technology in the production of good 3, there will be no change in wages in either country. The price of good 1 will then fall by an amount equal to the amount of the productivity increase in production of good 1. This will lead to gains for both countries, with the gains being proportional to the amount of good 1 consumed.3.(a)The home country has the greatest comparative advantage in commodity C.(b)The home wage rate can be at most 7/10.(c)The home country can produce only 1 commodity (c) for any wage rate greater than 1/2.4.(a)Country a has an absolute advantage in atomic reactors and tractors as they have higher absolute labor productivity in the production of these goods.(b)Country b has a comparative advantage in cars, tankers, atomic reactors and wheat, relative to tractors.(c)The pattern of trade will be determined by world prices, which are determined by demand for the products.5.(a)(b)In both of the above cases, the large country produces both goods and world relative prices are equal to the productivity ratio in that country.(c)6.(a)The amount of commodity 1 to be given up to obtain 1 unit of 3 is aL3/aL1 = 6/5.(b)The country will produce commodity 2 since its ratio of price to technical labor-hours required to produce one unit of it (Pi/aLi)is highest.(c)The real income of the worker before trade is 1/aL4 = 1/7. After trade, the real income is w/P4 where w is equal to P2/aL2 = 1/2 (since the country specializes in the production of commodity 2).7.If China gets better at producing something we both produce, and we still both produce it, we are worse off whether we export or import that good. Reasoning: Let good 15 be the numeraire - its price is fixed, and so is our wage rate and all other 14 goods we produce. In China, however, the wage rate must rise (since its productivity in 15 goes up), and with it the prices of all other commodities China produces. Hence our terms of trade worsen.nMultiple Choice Questions1.The labor theory of value assumes(a)wages differ across jobs.(b)land is a scarce factor of production.(c)as output expands, so does the number of labor hours required to produce one unit of output.(d)labor is the only scarce factor of production.(e)labor is not homogenous.2Consider a two-country world where country A is a more efficient producer of food and B is a more efficient producer of clothing. In the free trade equilibrium, both countries specialize. A discovers a labor saving breakthrough which allows them to produce both goods with half the labor previously required. A can now produce food and clothing more efficiently than B. What happens to trade and production patterns?(a)A specializes in clothing, B in food.(b)A produces both food and clothing.(c)Trade ceases since B can no longer compete in any good.(d)We cannot say.(e)Nothing.Questions 3-11 refer to a situation where aLC = 1, aLF = 2, aLC = 2, and aLF = 1.3.The autarky home relative price of food will be(a)1/4.(b)1/2.(c)1.(d)2.(e)4.4.Home labor productivity in the food sector is(a)1/4.(b)1/2.(c)1.(d)2.(e)4.5.If the foreign country can produce at most 10 units of clothing, then the most food they can produce is(a)2.(b)5.(c)8.(d)10.(e)20.6.If home production of food is 3 and home clothing production is 6, then the labor endowment must be (assuming full employment)(a)3.(b)6.(c)9.(d)12.(e)15.7.Which of the following is true?(a)Home has both a comparative and absolute advantage in clothing.(b)Home has a comparative advantage in clothing and an absolute advantage in food.(c)Home has a comparative advantage in food and an absolute advantage in clothing.(d)Home has both a comparative and absolute advantage in food.(e)None of the above.8.With trade, which of the following cannot occur?(a)Both produce food.(b)Home produces both and foreign produces clothing.(c)Home produces food and foreign produces both.(d)Home produces food and foreign produces clothing.(e)Both produce clothing.9.Which are possible production patterns with trade?(a)Both produce food.(b)Home produces food and foreign produces clothing.(c)Home produces both and foreign produces clothing.(d)Home produces food and foreign produces both.(e)All of the above.10.If the foreign wage rate is 1, then the highest the home wage could be is(a)1/4.(b)1/2.(c)1.(d)2.(e)4.11.If L = 200 and L = 10, and the world demand for food is perfectly inelastic at 100, then(a)home must be incompletely specialized.(b)foreign production must be incompletely specialized.(c)foreign will produce all clothing.(d)home will produce all food.(e)world demand cannot be met.12.It is observed that in a two-country Ricardian trading world, one country is incompletely specialized and the other is not. Then the world relative price of the two goods(a)must equal the labor input ratio in the specialized country.(b)must lie between the two countrys labor input ratios.(c)must be equal to one.(d)must equal the labor input ratio in the incompletely specialized country.(e)cannot be inferred from the above information.13.In the Ricardian model, equilibrium relative wages depend on(a)world demand for each good.(b)labors productivity in each good it actually produces.(c)world relative prices.(d)none of the above.(e)all of the above.14.Consider a two-country world with trade where both countries are completely specialized. An increase in the price of clothing must(a)decrease nominal wages in the clothing producing country.(b)increase nominal wages in the clothing producing country.(c)increase nominal wages in the food producing country.(d)decrease nominal wages in the food producing country.(e)will not change nominal wages in either country.15.Compensation to labor is $16 in the US and $2.40 in Mexico. This can be explained by(a)technology differences.(b)better trained workers in the US.(c)more capital in the US.(d)better capital in the US.(e)all of the above.Consider the following scenario for questions 1618. There are two countries and five goods. A produces good 1 and 2 while B produces 3, 4, and 5. B experiences a technological improvement in the production of good 5. Both countries continue producing the same goods. Assume the price of good 3 does not change through the following analysis.16.If the prices of 1 and 2 do not change, who gains and what happens to wage rates?(a)Wages in A fall and wages in B rise. B gains and A loses.(b)Wages in B fall and wages in A rise. A gains and B loses.(c)Wages in A and B remain constant. A gains and B loses since it is now getting less for good 5.(d)Wages in A and B rise. Both countries gain because of the wage increase.(e)Wages in A and B remain constant. Everyone who consumes good 5 gains.17.If the prices of 1 and 2 rise significantly, which of the following is possible?(a)Wages in A fall and wages in B rise. B gains and A loses.(b)Wages in B fall and wages in A rise. A gains and B loses.(c)Wages in B remain constant while wages in A rise. A gains and B loses.(d)Wages in A and B rise. Both countries gain because of the wage increase.(e)Wages in A and B remain constant. Everyone who consumes good 5 gains.18.If the prices of 1 and 2 fall significantly, which of the following is possible?(a)Wages in A fall and wages in B remain constant. B gains and A loses.(b)Wages in B fall and wages in A remain constant. A gains and B loses.(c)Wages in A and B remain constant. A and B lose since they are now getting less for their exports.(d)Wages in A and B rise. Both countries gain because of the wage in