Question

Section A:
1. Based on Ricardian's model insights, comment on the following claims:
Firm discussion: "Low-tech countries cannot compete with developed countries
A highly productive person. "
2. Specific factor model of international trade:
(A) State the economic questions it asks, key model assumptions, and key forecasts.
Of the model.
(B) What is the definition of a particular factor in international trade?
(C) Can you find an example of a real specific factor (this is ours)
Lecture), may suffer or benefit when the country is opened internationally
trade?
3. Consider a developing country (China) with two inputs, scarce capital (K) and two inputs.
Abundant labor force (L). The country has two products, computer (C) and desk (D).
Capital and labor. Computers are more capital intensive than desks.
• When the relative price of computer and desk goes down (that is, PC
PD
Decrease), how
Does it affect the purchasing power of capital and labor owners? Please
Please explain clearly.
1
Section B
4. (Ricardo model: completely specialized case) Used in two countries, domestic and foreign
One element for producing two products, shoes and computers, the labor force. You can do your own country
One unit of labor produces shoes and two units of labor produce computers. Foreigner
A country can produce shoes with a labor force of 2 units and a computer with a labor force of 3 units.
Home country is blessed with a labor force of 200 units, but foreign countries
We are blessed with a labor force of 300 units. Preference is the same in the two countries
And it is written by the following utility function: U (S, C) = 1.2 ln S + ln C, where S
C represents shoe and computer consumption respectively.
(A) What should the relative price PS be in a closed economy (closed economy without trade)?
PC
In your home country in equilibrium?
(B) Which countries have a comparative advantage in shoe production and why? None
Can you predict which products Home will export by solving the model numerically?
What will foreigners export if trade occurs?
(C) Draw a relative supply curve of the world using relative supply S + S
∗
Horizontal C + C ∗
Axis and relative price PS
PC
On the vertical axis. In what range price both
Do you specialize in the country? What if the price is not in this range?
(D) Here, we derive the relative demand function of the home country (relative demand S).
C
As a function of relative price PS
PC
). The relative demand function of the world
Same figure as (b). Find Equilibrium Relative Price and Relative Output
After the transaction. What do each country produce? (Note: Home and
Foreigners have the same utility function, the world's relative demand function
It is the same as your own country. )
(E) Is the equilibrium relative price PS?
PC
After higher or lower trade than a closed economy?
Draw a production potential frontier (PPF) and new consumption potential
Frontier (CPF) after trade with your own country. Explain if you are in your own country
Profit from trade.
(F) Do foreign countries benefit or lose from trade? Later draw PPF and CPF
Deal with foreign countries to explain it clearly.
5. (Specific factor model) 2 products, 2 countries, 3 factors (L is mobile)
K and T are specific factors, but two products are produced. Capital (K) is
A specific factor for producing cloth, land (T) is a specific factor for producing
food. Both sectors use the workforce as an input. How does international trade affect profits?
And income distribution between factors? In particular,
(A) Suppose the global price of fabrics rises compared to Autarky at Home.
Compared to that of food after international trade. How will this transaction affect you?
Employment of labor in these two sectors? Use the labor demand function diagram
In two sectors to explain it clearly.
(B) Suppose the global price of fabrics rises compared to Autarky at Home.
Compared to food after international trade. How do transactions affect purchases?
2
The power of the three elements of your country? Who will get it? Who will lose? Please
Please explain clearly.
(C) Suppose the global price of fabrics rises compared to Autarky at Home.
Compared to food after international trade. How do transactions affect purchases?
The power of three foreign factors? Who will get it? Who will lose? Please
Please explain clearly.
(D) What is the source of profits from international trade in this case? Is it the whole
Are Trade Benefits Always Positive for Countries? Use clearly labeled graphs
Production Possibility Frontier (PPF) and Consumption Possibility Frontier (CPF)
For my country to explain why. (Compared to the closed economy at home
The world price of cloth is higher than that of post-international food. )
Section C
6. According to Atlas, the trade patterns between China and the United States are very different.
The United States mainly exports services and high te

Answer 1

Section A 1)

2)