國際經(jīng)濟學克魯格曼教材答案完整版

HUAsystemofficeroom【HUA16H-TTMS2A-HUAS8Q8-HUAH1688】HUAsystemofficeroom【HUA16H-TTMS2A-HUAS8Q8-HUAH1688】國際經(jīng)濟學克魯格曼教材答案ProblemsandAnswerstoChapter2Q1:CanadaandAustraliaare(mainly)English-speakingcountrieswithpopulationsthatarenottoodifferentinsize(Canada’sis60percentlarger).ButCanadiantradeistwiceaslarge,relativetoGDP,asAustralia’s.Whyshouldthisbethecase

加拿大和澳大利亞都是英語國家，兩國的人口規(guī)模也相當（加拿大多60%），但是相對各自的GDP而言，加拿大的貿(mào)易額是澳大利亞的兩倍，為什么如此？A1:AccordingtoGravityModel,GDPisnottheonlyfactortoexplainthevolumeoftradebetweentwocountries,becausedistanceisalsoanimportantfactor.Consideringthedistance,thetransportationcostofAustraliaisrelativelyhigherthanthatofCanada,sotheattractivenessoftradeisreduced.However,CanadaisclosetotheUSAwhichisalargeeconomywhileAustraliaisnotclosetoanylargeeconomy,makingCanadamoreopenwhileAustraliaismoreautarky.GDP不是解釋兩國貿(mào)易量的唯一重要因素，距離也是至關(guān)重要的因素之一?？紤]到距離，澳大利亞的進出口運輸成本相對更高，因此減少了貿(mào)易吸引力。因為加拿大與美國相鄰，而澳大利亞不與任何一個大經(jīng)濟體相鄰，這使得加拿大更加開放，而澳大利亞更加自給自足。Q2:MexicoandBrazilhaveverydifferenttradingpatterns.MexicotradesmainlywiththeUnitedStates,BraziltradesaboutequallywiththeUnitedStatesandwiththeEuropeanUnion;MexicodoesmuchmoretraderelativetoitsGDP.Explainthesedifferencesusingthegravitymodel.墨西哥和巴西各自的貿(mào)易模式不同。墨西哥主要與美國貿(mào)易，巴西與美國和歐盟的貿(mào)易量大致相當。墨西哥的貿(mào)易量相對其GDP而言很大。用引力模型解釋這種現(xiàn)象。A2:MexicoisclosetotheUnitedStates,butisveryfarfromtheEuropeanUnion,soMexico’svalueoftradewiththeUnitedStatesislarge.BrazilisfarfromboththeUnitedStatesandEuropeanUnion,thus,Brazil’svolumeoftradewiththeUnitedStatesandwiththeEuropeanUnionisgenerallyequivalent.Mexico’svolumeoftradeislargerthanBrazil’s,fortworeasons:oneisthatMexicoisadjacenttotheUnitedStateswhichisalargeeconomy;theotheristhatMexicoisoneofthemembersofNAFTA.Brazilisfarfromanylargeeconomy,andthesizeoftheeconomyforthecountrieswhichhavesignedfreetradeagreementswithBrazilisrelativelysmall.墨西哥與美國毗鄰，但是距離歐盟很遠，因此它與美國的貿(mào)易量很大。巴西離美國和歐盟都很遠，因此巴西與美國和歐盟的貿(mào)易量大致相當。墨西哥貿(mào)易量比巴西大，其原因一方面由于墨西哥離大經(jīng)濟體美國近，另一方面由于它是北美貿(mào)易協(xié)定的成員國之一。巴西遠離任何一個大經(jīng)濟體，與它簽訂自由貿(mào)易協(xié)定的國家經(jīng)濟規(guī)模都比較小。Q3:Equation(2.1)saysthattradebetweenanytwocountriesisproportionaltotheproductoftheirGDPs.DoesthismeanthattheGDPofeverycountryintheworldweretoincreaseby50%,worldtradewouldincreaseby125%AnalyzethequestionusingthesimpleexampleshowninTable2-2.方程(2.1)表明兩個國家之間的貿(mào)易和它們的GDP乘積成正比。這是否意味著如果每個國家的GDP增加50%,世界的貿(mào)易量就增加125%分析這個問題用表格2-2的簡單例子。A3:Yes.Ifbothcountries’GDPincreaseby50%,otherthingsequal,multiplyingtherighthandsideofequation(2.1)by(1+50%)*(1+50%)=225%andmultiplyingthelefthandsideofequation(2.1)by1+125%=225%,therefore,thevolumeoftradewillincrease125%.UsingTable2-2,iffourcountries’GDPallincrease50%,thevolumeoftradewillincrease125%correspondingly,sothefirstlineofthetablewillbecome:—1.6*225%=3.60.4*225%=0.90.4*225%=0.9CountryA’sGDPincreasesto4*(1+50%)=6>(3.6+0.9+0.9=5.4).Accordingtotheassumption,theresultsarereasonablebecausetheresultsmeanthatpartofcountryA’sincomeisconsumedonimportsandpartofcountryA’sincomeisconsumedondomesticproducts,althoughtheportionconsumeddomesticallyissmallerthanthatofimports.是的。如果兩個國家的GDP均增加50%，其他條件不變，方程(2.1)的右邊乘以(1+50%)*(1+50%)=225%,方程式的左邊乘以1+125%=225%，所以，世界的貿(mào)易量就增加125%。結(jié)合表格2-2，如果四個國家的GDP都增加50%倍，貿(mào)易量也增加125%，則表格第一行的數(shù)據(jù)應(yīng)為：—1.6*225%=3.60.4*225%=0.90.4*225%=0.9A國的GDP增加到4*(1+50%)=6>(3.6+0.9+0.9=5.4)。根據(jù)假設(shè)，這個結(jié)果是合理的因為這意味著A國的支出一部分從國外進口一部分收入用于消費本國的產(chǎn)品，雖然用于本國消費的部分少于對其他國家的進口。Q4:Overthepastfewdecades,EastAsianeconomieshaveincreasedtheirshareofworldGDP.Similarly,intra-EastAsiantradethatis,tradeamongEastAsiannationshasgrownasashareofworldtrade.Morethanthat,EastAsiancountries3doanincreasingshareoftheirtradewitheachother.Explainwhy,usingthegravitymodel.在過去的幾十年中，東亞國家增加了它們在世界GDP中的份額。同樣，不僅東亞國家整體的貿(mào)易在世界貿(mào)易中的份額增加了，而且東亞國家內(nèi)相互間的貿(mào)易也增加了。應(yīng)用引力模型解釋這一現(xiàn)象。A4:Inthepast,EastAsiancountriesareallsmalleconomies,meaningthattheirsizeofeconomiesissmallandtheyareunabletoimportalotofgoods.AstheseEastAsiancountriesbecomericher,thedemandincreasesandtheycanimportmorethanbefore.ConsideringthatEastAsiancountrieshavebeenrichcountries,theybecometradingpartnerswitheachother;however,theymainlyimportedgoodsfromrichcountries.Basedongravitymodel,evenifthedistancebetweenSouthKoreaandTaiwanissmall,thevolumeofthetwocountriesisverysmallduetotheirsmallsizeofeconomies.Butnow,becausetheirGDPhaveincreased,thevolumeoftradebetweenthetwocountriesincreasedcorrespondingly.之前，東亞國家都是小經(jīng)濟體，這說明它們的市場規(guī)模很小，不能大量進口。隨著它們越來越富裕，消費需求增加，它們也就能更多地進口了。這樣，之前它們主要向富國出口，現(xiàn)在它們自己成為了富國，互相也就成為了貿(mào)易對象。根據(jù)引力模型，當韓國和臺灣GDP規(guī)模很小時，意味著盡管兩國的距離很近，但是兩國之間的貿(mào)易量很小。現(xiàn)在它們GDP增加了，它們之間的貿(mào)易量也隨之增大了。Q5:Acenturyago,mostFrenchimportscamefromrelativelydistantlocations:NorthAmerica,LatinAmerica,andAsia.Today,mostFrenchimportscomefromotherEuropeancountries.Howdoesthisfitwiththechangingtypesofgoodsthatmakeupworldtrade一個世紀以前，法國的進口產(chǎn)品來自相對遙遠的地區(qū)：北美、拉丁美洲，和亞洲。今天，法國絕大部分進口產(chǎn)品來自其他歐洲國家。這種變化是如何迎合不斷變化的世界貿(mào)易產(chǎn)品結(jié)構(gòu)的？A5:Acenturyago,eachcountry’stradingproductsaredeterminedbythecountry’sclimateandgeography.TheclimateandnaturalresourcesendowmentsinFrenchareverysimilartothatofotherEuropeancountries;therefore,Frenchcanonlyimportdifferentproducts,suchas,cotton,rubber,andetc,fromotherwesternhemisphere(NorthAmerica,LatinAmerica)andAsia.However,afterindustrialrevolution,manufacturingtradeincreaseddramatically.Withthedevelopmentoftransportationandcommunicatetechnology,French’stradevolumewithotherEuropeancountriesincreasescorrespondingly,asthegravitymodelpredicteddirectly.一個世紀以前，各國貿(mào)易產(chǎn)品是由氣候和地理條件決定的。法國的氣候和自然資源稟賦和歐洲其他國家很相似，這樣法國只能從西半球其他國家、亞洲進口像棉花、橡膠這樣的產(chǎn)品，從歐洲其他國家進口產(chǎn)品很少。工業(yè)革命之后，制造品貿(mào)易增長，并且隨著交通和通訊的改進繼續(xù)擴張，因此法國轉(zhuǎn)向與歐洲其他經(jīng)濟體大量開展貿(mào)易是自然而然的，這就是引力模型的一個直接預(yù)測。Chapter31．Homehas1200unitsoflaboravailable.Itcanproducetwogoods,applesandbananas.Theunitlaborrequirementinappleproductionis3,whileinbananaproductionitis2.a．Graphouttheproductionpossibilitiesfrontier:b．Whatistheopportunitycostofapplesintermsofbananas?

c．Intheabsenceoftrade,whatwouldthepriceofapplesintermsofbananasbe?Intheabsenceoftrade,sincelaboristheonlyfactorofproductionandsupplydecisionsaredeterminedbytheattemptsofindividualstomaximizetheirearningsinacompetitiveeconomy,onlywhenwillbothgoodsbeproduced.So在沒有貿(mào)易時，因為勞方是唯一的生產(chǎn)要素，并且供應(yīng)決定取決于個體嘗試最大化他們的在競爭經(jīng)濟的收入，只有當兩件物品將被生產(chǎn)。因此2．Homeisasdescribedinproblem1.Thereisnowalsoanothercountry,Foreign,withalaborforceof800.Foreign’sunitlaborrequirementinappleproductionis5,whileinbananaproductionitis1.a．GraphForeign’sproductionpossibilitiesfrontier:b．Constructtheworldrelativesupplycurve.3．Nowsupposeworldrelativedemandtakesthefollowingform:Demandforapples/demandforbananas=priceofbananas/priceofapples.a．Graphtherelativedemandcurvealongwiththerelativesupplycurve:∵Whenthemarketachievesitsequilibrium,wehave∴RDisahyperbolab．Whatistheequilibriumrelativepriceofapples?

TheequilibriumrelativepriceofapplesisdeterminedbytheintersectionoftheRDandRScurves.RD:RS:∴∴c．Describethepatternoftrade.∵∴Inthistwo-countryworld,Homewillspecializeintheappleproduction,exportapplesandimportbananas.Foreignwillspecializeinthebananaproduction,exportbananasandimportapples.d．ShowthatbothHomeandForeigngainfromtrade.InternationaltradeallowsHomeandForeigntoconsumeanywherewithinthecoloredlines,whichlieoutsidethecountries’productionpossibilityfrontiers.Andtheindirectmethod,specializinginproducingonlyoneproductionthentradewithothercountry,isamoreefficientmethodthandirectproduction.Intheabsenceoftrade,Homecouldgainthreebananasbyforegoingtwoapples,andForeigncouldgainbyoneforegoingfivebananas.Tradeallowseachcountrytotradetwobananasforoneapple.HomecouldthengainfourbananasbyforegoingtwoappleswhileForeigncouldgainoneapplebyforegoingonlytwobananas.SobothHomeandForeigngainfromtrade.國際貿(mào)易允許本國和外國任何地方在分界線之內(nèi)消耗，在一國生產(chǎn)可能性邊境之外說謊。并且間接方法，專門研究導致一生產(chǎn)比直接生產(chǎn)然后只換與其他國家，是一個高效率的方法。在沒有貿(mào)易時，首頁可能由前面二個蘋果獲取三個香蕉，并且外國可能由一前面五個香蕉獲取。貿(mào)易允許每個國家為一個蘋果換二個香蕉。首頁只能由前面二個蘋果然后獲取四個香蕉，當外國時能由前面二個香蕉獲取一個蘋果。因此首頁和從貿(mào)易的外國獲取。4．Supposethatinsteadof1200workers,Homehad2400.Findtheequilibriumrelativeprice.WhatcanyousayabouttheefficiencyofworldproductionandthedivisionofthegainsfromtradebetweenHomeandForeigninthiscase?RD:RS:∴∴Inthiscase,Foreignwillspecializeinthebananaproduction,exportbananasandimportapples.ButHomewillproducebananasandapplesatthesametime.AndtheopportunitycostofbananasintermsofapplesforHomeremainsthesame.SoHomeneithergainsnorlosesbutForeigngainsfromtrade.在這種情況下，外國將專門研究香蕉生產(chǎn)，出口香蕉和進口蘋果。但是本國同時將生產(chǎn)香蕉和蘋果。并且香蕉的機會成本根據(jù)蘋果的本國的依然是同樣。因此本國不獲取也不丟失，而是從貿(mào)易的外國獲取。5．SupposethatHomehas2400workers,buttheyareonlyhalfasproductioninbothindustriesaswehavebeenassuming,Constructtheworldrelativesupplycurveanddeterminetheequilibriumrelativeprice.Howdothegainsfromtradecomparewiththoseinthecasedescribedinproblem4?

Inthiscase,thelaborisdoubledwhiletheproductivityoflaborishalved,sothe＂effectivelabor＂remainsthesame.Sotheanswerissimilartothatin3.AndbothHomeandForeigncangainfromtrade.ButForeigngainslessercomparewiththatinthecase4.6．”Koreanworkersearnonly$2.50anhour;ifweallowKoreatoexportasmuchasitlikestotheUnitedStates,ourworkerswillbeforceddowntothesamelevel.Youcan’timporta$5shirtwithoutimportingthe$2.50wagethatgoeswithit.”Discuss.Infact,relativewagerateisdeterminedbycomparativeproductivityandtherelativedemandforgoods.Korea’slowwagereflectsthefactthatKoreaislessproductivethantheUnitedStatesinmostindustries.Actually,tradewithalessproductive,lowwagecountrycanraisethewelfareandstandardoflivingofcountrieswithhighproductivity,suchasUnitedStates.Sothispauperlaborargumentiswrong.實際上，相對工資率取決于比較生產(chǎn)力和對物品的相對需求。Korea’s低工資反射事實韓國比多數(shù)產(chǎn)業(yè)的美國較不有生產(chǎn)力的。實際上，與一個較不有生產(chǎn)力，低工資國家的貿(mào)易可能培養(yǎng)國家福利和生活水平有高生產(chǎn)力的，例如美國。因此這個叫花子勞方論據(jù)是錯誤的。7．JapaneselaborproductivityisroughlythesameasthatoftheUnitedStatesinthemanufacturingsector(higherinsomeindustries,lowerinothers),whiletheUnitedStates,isstillconsiderablymoreproductiveintheservicesector.Butmostservicesarenon-traded.SomeanalystshavearguedthatthisposesaproblemfortheUnitedStates,becauseourcomparativeadvantageliesinthingswecannotsellonworldmarkets.Whatiswrongwiththisargument?

Thecompetitiveadvantageofanyindustrydependsonboththerelativeproductivitiesoftheindustriesandtherelativewagesacrossindustries.Sotherearefouraspectsshouldbetakenintoaccountbeforewereachconclusion:boththeindustriesandservicesectorsofJapanandU.S.,notjustthetwoservicesectors.Sothisstatementdoesnotbadeonthereasonablelogic.所有產(chǎn)業(yè)的競爭優(yōu)勢取決于產(chǎn)業(yè)的相對生產(chǎn)力和橫跨產(chǎn)業(yè)的親戚薪水。因此，在我們得出結(jié)論之前，有四個方面應(yīng)該考慮到：產(chǎn)業(yè)和日本和美國，不僅二個服務(wù)部門的服務(wù)部門。不因此這個聲明在合理的邏輯出了價。8．AnyonewhohasvisitedJapanknowsitisanincrediblyexpensiveplace;althoughJapaneseworkersearnaboutthesameastheirU.S.counterparts,thepurchasingpoweroftheirincomesisaboutone-thirdless.Extendyourdiscussingfromquestion7toexplainthisobservation.(Hint:Thinkaboutwagesandtheimpliedpricesofnon-tradegoods.)TherelativehigherpurchasingpowerofU.S.issustainedandmaintainedbyitsconsiderablyhigherproductivityinservices.Becausemostofthoseservicesarenon-traded,Japanesecouldnotbenefitfromthoselowerservicecosts.AndU.S.doesnothavetofacealowerinternationalpriceofservices.SothepurchasingpowerofJapaneseisjustone-thirdoftheirU.S.counterparts.美國的相對更高的購買力由它的在服務(wù)的相當?shù)馗叩纳a(chǎn)力承受并且維護。由于大多那些服務(wù)non-traded，日語不可能受益于那些更低的服務(wù)費用。并且美國不必須面對服務(wù)的一個更低的國際價格。因此日語的購買力是他們的美國相對物的三分之一。9．Howdoesthefactthatmanygoodsarenon-tradedaffecttheextentofpossiblegainsfromtrade?Actuallythegainsfromtradedependedontheproportionofnon-tradedgoods.Thegainswillincreaseastheproportionofnon-tradedgoodsdecrease.10．Wehavefocusedonthecaseoftradeinvolvingonlytwocountries.Supposethattherearemanycountriescapableofproducingtwogoods,andthateachcountryhasonlyonefactorofproduction,labor.Whatcouldwesayaboutthepatternofproductionandinthiscase(Hint:Tryconstructingtheworldrelativesupplycurve.)Anycountriestotheleftoftheintersectionoftherelativedemandandrelativesupplycurvesexportthegoodinwhichtheyhaveacomparativeadvantagerelativetoanycountrytotherightoftheintersection.Iftheintersectionoccursinahorizontalportionthenthecountrywiththatpriceratioproducesbothgoods.Chapter4In1986,thepriceofoilonworldmarketsdroppedsharply.SincetheUnitedStatesisanoil-importingcountry,thiswaswidelyregardedasgoodfortheU.S.economy.YetinTexasandLouisiana1986wasayearofeconomicdecline.Why?

ItcandeducethatTexasandLouisianaareoil-producingstatesofUnitedStates.Sowhenthepriceofoilonworldmarketsdeclined,therealwageofthisindustryfellintermsofothergoods.Thismightbethereasonofeconomicdeclineinthesetwostatesin1986.2。Aneconomycanproducegood1usinglaborandcapitalandgood2usinglaborandland.Thetotalsupplyoflaboris100units.Giventhesupplyofcapital,theoutputsofthetwogoodsdependsonlaborinputasfollows:Toanalyzetheeconomy’sproductionpossibilityfrontier,considerhowtheoutputmixchangesaslaborisshiftedbetweenthetwosectors.Graphtheproductionfunctionsforgood1andgood2.Graphtheproductionpossibilityfrontier.Whyisitcurved?QQ1Q2L1L2PPFThePPFiscurvedduetodecliningmarginalproductoflaborineachgood.Thetotallaborsupplyisfixed.SoasL1rises,MPL1falls;correspondingly,asL2falls,MPL2rises.SoPPgetssteeperaswemovedownittotheright.Themarginalproductoflaborcurvescorrespondingtotheproductionfunctionsinproblem2areasfollows:Supposethatthepriceofgood2relativetothatofgood1is2.Determinegraphicallythewagerateandtheallocationoflaborbetweenthetwosectors.Withtheassumptionthatlaborisfreelymobilebetweensectors,itwillmovefromthelow-wagesectortothehigh-wagesectoruntilwagesareequalized.Soinequilibrium,thewagerateisequaltothevalueoflabor’smarginalproduct.假設(shè)勞方自由地是在區(qū)段之間的機動性，它從低工資的區(qū)段將移動向high-wage區(qū)段，直到薪水被調(diào)平。因此在平衡，工資率與labor’s邊際產(chǎn)品的價值是相等的。Theabscissaofpointofintersectionillustratedaboveshouldbebetween(20,30).Sinceweonlyhavetofindouttheapproximateanswer,linearfunctioncouldbeemployed.ThelaborallocationbetweenthesectorsisapproximatelyL1=27andL2=73.Thewagerateisapproximately0.98.被說明的交點橫坐標以上應(yīng)該之間(20，30)。因為我們必須只發(fā)現(xiàn)近似答復，線性函數(shù)可能被使用。在區(qū)段之間的The辛苦分派是大約L1=27和L2=73。工資率是大約0.98。Usingthegraphdrawnforproblem2,determinetheoutputofeachsector.Thenconfirmgraphicallythattheslopoftheproductionpossibilityfrontieratthatpointequalstherelativeprice.QQ1Q2L1L2PPFTherelativepriceisP2/P1=2andwehavegottheapproximatelaborallocation,sowecanemploythelinearfunctionagaintocalculatetheapproximateoutputofeachsector:Q1=44andQ2=90.相對價格是P2/P1=2，并且我們有近似辛苦分派，因此我們可以再使用線性函數(shù)計算每個區(qū)段近似產(chǎn)品：Q1=44和Q2=90。Supposethattherelativepriceofgood2fallsto1.Repeat(a)and(b).Therelativedeclineinthepriceofgood2causedlabortobereallocated:laborisdrawnoutofproductionofgood2andentersproductionofgood1(Ｌ1=62,L2=38).Thisalsoleadstoanoutputadjustment,thatis,productionofgood2fallsto68unitsandproductionofgood1risesto76units.Andthewagerateisapproximatelyequalto0.74.在導致的價格的相對衰落的好2將被再分配的勞方：勞方被畫出于生產(chǎn)好2并且輸入好1的生產(chǎn)(Ｌ1=62，L2=38)。這也導致輸出調(diào)整，即，好2個秋天到68個單位的生產(chǎn)和生產(chǎn)好1上升到76個單位。并且工資率是大約相等到0.74。QQ1Q2L1L2PPFCalculatetheeffectsofthepricechangeontheincomeofthespecificfactorsinsectors1and2.WiththerelativepricechangefromP2/P1=2toP2/P1=1,thepriceofgood2hasfallenby50percent,whilethepriceofgood1hasstayedthesame.Wageshavefallentoo,butbylessthanthefallinP2(wagesfellapproximately25percent).Thus,therealwagerelativetoP2actuallyriseswhilerealwagerelativetoP1falls.Hence,todeterminethewelfareconsequenceforworkers,theinformationabouttheirconsumptionsharesofgood1andgood2isneeded.相對價格變動，而價格的好1停留了同樣，從P2/P1=2到P2/P1=1，價格的好2由50%下落了。薪水由較少比在P2的秋天下落了，但是(薪水落大約25%)。因此，當實際工資相對P1落時，實際工資相對P2實際上上升。因此，確定工作者的福利救濟后果，關(guān)于他們的消耗量份額的信息好1和好2是需要的。Inthetextweexaminedtheimpactsofincreasesinthesupplyofcapitalandland.Butwhatifthemobilefactor,labor,increasesinsupply?Analyzethequalitativeeffectsofanincreaseinthesupplyoflaborinthespecificfactorsmodel,holdingthepriceofbothgoodsconstant.Foraneconomyproducingtwogoods,XanY,withlabordemandsreflectedbytheirmarginalrevenueproductcurves,thereisaninitialwageofw1andaninitiallaborallocationofLx=OxAandLy=OyA.Whenthesupplyoflaborincreases,therightboundaryofthediagramillustratedbelowpushedouttoOy’.ThedemandforlaborinsectorYispulledrightwardwiththeboundary.Thenewintersectionofthelabordemandcurvesshowsthatlaborexpandsinbothsectors,andthereforeoutputofbothXandYalsoexpand.Therelativeexpansionofoutputisambiguous.Wagespaidtoworkersfall.WWGraphtheeffectontheequilibriumforthenumericalexampleinproblems2and3,givenarelativepriceof1,whenthelaborforceexpandsfrom100to140.Withthelawofdiminishingreturns,thenewproductionpossibilityfrontierismoreconcaveandsteeper(flatter)attheendswhentotallaborsupplyincreases.L1increaseto90from62andL2increasesto50from38.Wagesdeclinefrom0.74to0.60.ThisnewallocationoflaborleadstoanewoutputmixofapproximatelyQ1=85andQ2=77.QQ1Q2L1L2PPFChapter4IntheUnitedStateswherelandischeap,theratiooflandtolaborusedincattlerisingishigherthanthatoflandusedinwheatgrowing.Butinmorecrowdedcountries,wherelandisexpensiveandlaborischeap,itiscommontoraisecowsbyusinglesslandandmorelaborthanAmericansusetogrowwheat.CanwestillsaythatraisingcattleislandintensivecomparedwithfarmingwheatWhyorwhynot

Thedefinitionofcattlegrowingaslandintensivedependsontheratiooflandtolaborusedinproduction,notontheratiooflandorlabortooutput.TheratiooflandtolaborincattleexceedstheratioinwheatintheUnitedStates,implyingcattleislandintensiveintheUnitedStates.Cattleislandintensiveinothercountriestooiftheratiooflandtolaborincattleproductionexceedstheratioinwheatproductioninthatcountry.ThecomparisonbetweenanothercountryandtheUnitedStatesislessrelevantforansweringthequestion.Supposethatatcurrentfactorpricesclothisproducedusing20hoursoflaborforeachacreofland,andfoodisproducedusingonly5hoursoflaborperacreofland.Supposethattheeconomy’stotalresourcesare600hoursoflaborand60acresofland.Usingadiagramdeterminetheallocationofresources. WecansolvethisalgebraicallysinceL=LC+LF=600andT=TC+TF=60. ThesolutionisLC=400,TC=20,LF=200andTF=40.LaborLaborLandClothFoodNowsupposethatthelaborsupplyincreasefirstto800,then1000,then1200hours.UsingadiagramlikeFigure4-6,traceoutthechangingallocationofresources.LaborLaborLandClothFood0l8000l10000l1200Whatwouldhappenifthelaborsupplyweretoincreaseevenfurther?

Atconstantfactorprices,somelaborwouldbeunused,sofactorpriceswouldhavetochange,ortherewouldbeunemployment.“Theworld’spoorestcountriescannotfindanythingtoexport.Thereisnoresourcethatisabundant—certainlynotcapitalorland,andinsmallpoornationsnotevenlaborisabundant.”Discuss.Thegainsfromtradedependoncomparativeratherthanabsoluteadvantage.Astopoorcountries,whatmattersisnottheabsoluteabundanceoffactors,buttheirrelativeabundance.Poorcountrieshaveanabundanceoflaborrelativetocapitalwhencomparedtomoredevelopedcountries.TheU.S.labormovement—whichmostlyrepresentsblue-collarworkersratherthanprofessionalsandhighlyeducatedworkers—hastraditionallyfavoredlimitsonimportsformless-affluentcountries.IsthisashortsightedpolicyofarationaloneinviewoftheinterestsofunionmembersHowdoestheanswerdependonthemodeloftrade

IntheRicardo’smodel,laborgainsfromtradethroughanincreaseinitspurchasingpower.Thisresultdoesnotsupportlaboruniondemandsforlimitsonimportsfromlessaffluentcountries.IntheImmobileFactorsmodellabormaygainorlosefromtrade.Purchasingpowerintermsofonegoodwillrise,butintermsoftheothergooditwilldecline.TheHeckscher-Ohlinmodeldirectlydiscussesdistributionbyconsideringtheeffectsoftradeontheownersoffactorsofproduction.Inthecontextofthismodel,unskilledU.S.laborlosesfromtradesincethisgrouprepresentstherelativelyscarcefactorsinthiscountry.TheresultsfromtheHeckscher-Ohlinmodelsupportlaboruniondemandsforimportlimits.ThereissubstantialinequalityofwagelevelsbetweenregionswithintheUnitedStates.Forexample,wagesofmanufacturingworkersinequivalentjobsareabout20percentlowerintheSoutheastthantheyareintheFarWest.WhichoftheexplanationsoffailureoffactorpriceequalizationmightaccountforthisHowisthiscasedifferentfromthedivergenceofwagesbetweentheUnitedStatesandMexico(whichisgeographicallyclosertoboththeU.S.SoutheastandtheFarWestthantheSoutheastandFarWestaretoeachother)

Whenweemployfactorpriceequalization,weshouldpayattentiontoitsconditions:bothcountries/regionsproducebothgoods;bothcountrieshavethesametechnologyofproduction,andtheabsenceofbarrierstotrade.InequalityofwagelevelsbetweenregionswithintheUnitedStatesmaycausedbysomeorallofthesereasons.Actually,thebarrierstotradealwaysexistintherealworldduetotransportationcosts.AndthetradebetweenU.S.andMexico,bycontrast,issubjecttolegallimits;togetherwithculturaldifferencesthatinhibittheflowoftechnology,thismayexplainwhythedifferenceinwageratesissomuchlarger.ExplainwhytheLeontiefparadoxandthemorerecentBowen,Leamer,andSveikauskasresultsreportedinthetextcontradictthefactor-proportionstheory.Thefactorproportionstheorystatesthatcountriesexportthosegoodswhoseproductionisintensiveinfactorswithwhichtheyareabundantlyendowed.OnewouldexpecttheUnitedStates,whichhasahighcapital/laborratiorelativetotherestoftheworld,toexportcapital-intensivegoodsiftheHeckscher-Ohlintheoryholds.LeontieffoundthattheUnitedStatesexportedlabor-intensivegoods.Bowen,LeamerandSveikauskasfoundthatthecorrelationbetweenfactorendowmentandtradepatternsisweakfortheworldasawhole.Thedatadonotsupportthepredictionsofthetheorythatcountries'exportsandimportsreflecttherelativeendowmentsoffactors.InthediscussionofempiricalresultsontheHeckscher-Ohlinmodel,wenotedthatrecentworksuggeststhattheefficiencyoffactorsofproductionseemstodifferinternationally.Explainhowthiswouldaffecttheconceptoffactorpriceequalization.Iftheefficiencyofthefactorsofproductiondiffersinternationally,thelessonsoftheHeckscher-Ohlintheorywouldbeappliedto“effectivefactors”whichadjustforthedifferencesintechnologyorworkerskillsorlandquality(forexample).Theadjustedmodelhasbeenfoundtobemoresuccessfulthantheunadjustedmodelatexplainingthepatternoftradebetweencountries.Factor-priceequalizationconceptswouldapplytotheeffectivefactors.Aworkerwithmoreskillsorinacountrywithbettertechnologycouldbeconsideredtobeequaltotwoworkersinanothercountry.Thus,thesinglepersonwouldbetwoeffectiveunitsoflabor.Thus,theonehigh-skilledworkercouldearntwicewhatlowerskilledworkersdoandthepriceofoneeffectiveunitoflaborwouldstillbeequalized.Chapter6Foreachofthefollowingexamples,explainwhetherthisisacaseofexternalorinternaleconomiesofscale:MostmusicalwindinstrumentsintheUnitedStatesareproducedbymorethanadozenfactoriesinElkhart,Indiana.AllHondassoldintheUnitedStatesareeitherimportedorproducedinMarysville,Ohio.AllairframesforAirbus,Europe’sonlyproduceroflargeaircraft,areassembledinToulouse,France.Hartford,ConnecticutistheinsurancecapitalofthenortheasternUnitedStates.Externaleconomiesofscale:Casesaandd.Theproductionsofthesetwoindustriesconcentrateinafewlocationsandsuccessfullyreduceeachindustry'scostsevenwhenthescaleofoperationofindividualfirmsremainssmall.Externaleconomiesneednotleadtoimperfectcompetition.Thebenefitsofgeographicalconcentrationmayincludeagreatervarietyofspecializedservicestosupportindustryoperationsandlargerlabormarketsorthickerinputmarkets.Internaleconomiesofscale:Casesbandc.Bothofthemoccurattheleveloftheindividualfirm.Thelargertheoutputofaproductbyaparticularfirm,theloweritsaveragecosts.Thisleadstoimperfectcompetitionasinpetrochemicals,aircraft,andautos.Inperfectcompetition,firmsetpriceequaltomarginalcost.Whyisn’tthispossiblewhenthereareinternaleconomiesofscale?

Unlikethecaseofperfectlycompetitivemarkets,undermonopolymarginalrevenueisnotequaltoprice.Theprofitmaximizingoutputlevelofamonopolistoccurswheremarginalrevenueequalsmarginalcost.Marginalrevenueisalwayslessthanpriceunderimperfectlycompetitivemarketsbecause