Problems-and-Answers-to-Chapter-3

1 Problems and Answers to Chapter 3 Q1 Home has 2 400 units of labor available It can produce two goods oranges and pears The unit labor requirement in orange production is 6 while in pear production it is 4 a Graph Home s production possibility frontier b What is the opportunity cost of oranges in terms of pears c In the absence of trade what would be the price of oranges in terms of pears Why 本国共有 2400 单位的劳动 能生产两种产品 橙子和梨 橙子的单位劳动投入是 6 梨的单位劳动投入是 4 a 画出本国的生产可能性边界 b 用梨衡量的橙子的机会成本是多少 c 贸易前 橙子对梨的相对价格是多少 为什么 A1 Given L 2400 aLO 6 aLP 4 a Home country s production possibility frontier is Line AB Home Orange Production QO in units Home Pear Production QP in units 400 600 A B PPF A 0 L aLO 2400 6 400 B L aLP 2400 4 600 0 0 2 b The opportunity cost of oranges in terms of pears is equal to the absolute value of the slope of Home s Production Possibility Frontier PPF aLO aLP 6 4 3 2 c In the absence of trade the price of oranges in terms of pears would be equal to their relative unit labor requirements See page 31 in textbook Po Pp aLO aLP 6 4 3 2 Under this condition the wages in both industries are equal and both goods will be produced Q2 Home is as described in problem 1 There is now also another country Foreign with a labor force of 1600 Foreign s unit labor requirement in orange production is 10 while in pear production it is 2 a Graph Foreign s production possibilities frontier b Construct the world relative supply curve 假设本国的情况和 Q1 相同 外国拥有 1600 单位的劳动 外国橙子的单位劳动投 入是 10 梨的是 2 a 画出外国的生产可能性边界 b 画出世界相对供给曲线 A2 Given L 1600 aLO 10 aLP 2 a Foreign Orange Production QO in units Foreign Pear Production QP in units 160 800 C D PPF C 0 L aLO 1600 10 160 D L aLP 1600 2 800 0 0 3 Foreign country s production possibility frontier is Line CD b aLO aLP 6 4 3 2 a LO a LP 10 2 5 L aLO L aLP 2400 6 1600 2 1 2 Q3 Now suppose world relative demand takes the following form Demand for oranges demand for pears price of pears price of oranges a Graph the relative demand curve along with the relative supply curve b What is the equilibrium relative price of oranges c Describe the pattern of trade d Show that both Home and Foreign gain from trade 现假定世界相对需求的表示如下 对橙子的需求 对梨的需求 橙子的价格 梨的 价格 a 在相对供给曲线的同一张图上画出世界相对需求曲线 b 橙子的均衡相对价格是多少 c 描述本题的贸易模式 Relative Price of Oranges PO PP Quantity of Orange QO QO QP QP 3 2 L aLO L aLP 1 2 H 2 1 2 RS 0 5 4 d 说明本国和外国都可以从贸易中获利 A3 Given DO DO DP DP PP PO so RD curve could be drawn by using function y 1 x Y is orange s relative price PO PP X is orange s relative quantity a a a Please see RD curve in the graph of Q2 b The equilibrium relative price of oranges is determined by the intersection of the relative supply and relative demand curves at point E 1 2 2 c At point E where the relative price of oranges is between the two countries pretrade prices In this case each country specializes in the production of the good in which it has a comparative advantage Home produces only oranges Foreign only pears Y X 2 1 2 E 1 2 2 H 2 1 2 0 5 1 F 1 1 G 1 5 5 12 1 2 Y 1 X Relative Price of Oranges PO PP Quantity of Orange QO QO QP QP 3 2 L aLO L aLP 1 2 E 1 2 2 H 2 1 2 RS 0 5 RD 1 F 1 1 G 1 5 5 1 2 1 2 2 L aLO L aLP 2400 6 1600 2 400 800 1 2 5 d Consider two alternative ways of using an hour of labor On one side Home could use the hour directly to produce 1 aLP units of pear Alternatively Home could use the hour to produce 1 aLO units of orange These oranges could then be traded for pear with each trading for PO PP units so the original hour of labor yields 1 aLO PO PP units of pear This will be more pear than the hour could have produced directly as long as 1 aLO PO PP 1 aLP or PO PP aLO aLP In international equilibrium aLO aLP PO PP aLO aLP in this case 6 4 2 10 5 i e 3 2 2 5 Home can produce oranges more efficiently by making oranges and trading them than by producing pears directly for itself similar to Foreign Home can gain 3 units of pear by reducing 2 units of orange while Foreign can gain 1 unit of orange by reducing 5 units of pear With trade each country can gain 1 unit of orange by reducing 2 units of pear Then Home can gain 4 units of pear by reducing 2 units of orange while Foreign can gain 1 unit of orange by reducing 2 units of pear So Home can get 1 more unit of pear which is Home s gain from trade while Foreign can save 3 units of pear which is Foreign s gain from trade Q4 Suppose that instead of 2 400 workers Home had 4 800 Find the equilibrium relative price What can you say about the efficiency of world production and the division of the gains from trade between Home and Foreign in this case 假设本国有 4800 名工人而不是 2400 名 求新的均衡价格 请评述在这种情况下 世界的生产效率和两国之间贸易所得的分配 A4 If the number of Home workers increases from 2400 to 4800 then the turning point will switch from 1 2 3 2 and 1 2 5 to 1 3 2 and 1 5 respectively The intersection between the relative demand curve and the relative supply curve will be located at 2 3 3 2 lower than the previous point At this point Home is indifferent in producing either oranges or pears In this question Foreign can still gain from trade However no matter there is trade or not the opportunity cost of orange relative to pear will stay the same therefore Home will not gain or lose from trade 6 Q5 Suppose that Home has 4 800 workers but is only half as productive in both industries as we have been assuming Construct the world relative supply curve and determine the equilibrium relative price How do the gains from trade compare with those in the case describe in problem 4 假定本国有 4800 名工人 但是他们的生产效率只有 Q1 中假设的一半 画出世界 相对供给曲线 并确定均衡的相对价格 比较本国在本题和 Q4 中的贸易所得 A5 In this case the effective labor productivity will not change then the graph of the world relative supply curve and the equilibrium price will be the same as that in Q3 Q6 Chinese workers earn only 75 per hour if we allow China to export as much as it likes our workers will be forced down to the same level You can t import a 12 shirt without importing the 75 wage that goes with it Discuss 中国工人每小时的工资仅为 0 75 美元 如果允许中国无限地 向美国 出口 美国 工人的工资也会降到这个水平 你不可能只进口 12 美元一件的 T 恤衫 而不 进口 0 75 美元的工资率 试分析这段话 题中虽然没有出现 美国 但是从 our workers 和写书人的国籍可以推断出来 A6 This is a special example in Pauper Labor Argument The key to this question is that the relative wage is determined by the relative productivity and the relative demand Based on the data in this question productivity level and wages are closely related China s low wage reflects that productivity in most of Chinese industries is lower than that in the same industry in the U S As mentioned in this Chapter if high productivity country trade with low productivity country the living standard of low wage country will increase Q7 Japanese labor productivity is roughly the same as that of the United States in the manufacturing sector higher in some industries lower in others while the United States is still considerably more productive in the service sector But most services are nontraded Some analysts have argued that this poses a problem for the United States because our comparative advantage lies in things we cannot sell on world markets What is wrong with this argument 7 在制造业部门 日本的劳动生产率大致和美国相同 有的产业比较高 有的比较低 美国服务业的劳动生产率相当高 但是大部分服务是非贸易品 一些分析家认为这 给美国经济带来了问题 因为美国具有比较优势的产品无法再世界市场上出售 这个 结论错在什么地方 A7 The problem of this conclusion is to determine the comparative advantage without considering all the information In this question 4 sectors need labor force U S service sector Japanese service sector U S manufacturing sector and Japanese manufacturing sector It is not enough to compare unit labor requirement in service sector If U S labor in service sector is more efficient than that in Japan the absolute advantage in service sector is neither a sufficient nor necessary condition to determine comparative advantage To determine the comparative advantage we also need to know the ratio in industry Comparative advantage is determined not only by the relative productivity within the industry but also by the relative wage between industries Q8 Anyone who has visited Japan know it is an incredibly expensive place although Japanese workers earn about the same as their U S counterparts the purchasing power of their incomes is about one third less Extend your discussion from question 7 to explain this observation Hint Think about wages and the implied prices of nontraded goods 访问过日本的人都知道日本的物价很高 而日本工人的工资和他们的美国同行差不 多 结果他们收入的购买力比美国的少了 1 3 扩展习题 7 的讨论来解释这个想象 提示 考虑工资率和非贸易品的价格 A8 Although Japanese workers earn about the same as their U S counterparts the price level in service sector of U S is higher than that of Japan This is because in service sector the productivity in the U S is higher than that in Japan so the price in the U S is relatively lower The extra gain from high productivity increases the purchasing power of U S workers However most services are non traded Japan cannot gain from low cost service of U S through trade and it is impossible for Japan to use the relatively low price in international market At the same time U S cannot increase the domestic price of service Therefore as the price level of services is relatively low and services are non traded the purchasing power of U S is relatively higher than that of Japan 8 Q9 How does the fact that many goods are nontraded affect the extent of possible gains from trade 许多产品不能进行贸易的事实对贸易所得的大小有什么影响 A9 Gains from trade can also exist in the form of non traded As the share of non traded increases the gains from trade decrease In other words as more and more products cannot enter international market the potential gains from trade are lower and lower If the transaction costs are too high to