孙铱 Wednesday, January 14, 2009
and the welfare of the two countries of the following: a. An increase in A?s capital stock. b. An increase in A?s labor supply.
Answer：
·Country A trade X for Y while Country B trade Y for X.
·An increase in the capital stock of either country favors the production of X. While
an increase in the labor stock of either country favors the production of Y.
·Export-biased growth worse the growing country's terms of trade, its national welfare can rise, decline or unchanged. Improt-biased growth improves the growing country's terms of trade and welfare.
【在生产过程中，当一种要素供给增加时会导致经济的偏向性增长。无论哪个国家，资本存量的增加会导致X产品产量上升，劳动供给的增加会导致Y产品产量上升。根据赫克歇尔-俄林模型，一国将出口密集使用其相对丰裕要素所生产的产品。所以，A国应该出口X产品，进口Y产品，出口偏向型增长会使得本国贸易条件恶化、福利水平下降，但是贫困化增长又使得该国福利水品的变化变得不不确定。但是可以肯定的是，进口偏向性会使得一国福利水平上升。
a、 A国贸易条件恶化，福利水平部确定；B国贸易条件改善，福利水平上升 b、 A国贸易条件改善，福利水平上升；B国两者皆受损 】
20. (1) A tariff improves Home?s terms of trade and worsens Foreign?s.
(2)A Home export subsidy worsens Home?s terms of trade and improves Foreign?s. (Analyse them with RS、RD curves)
Answer：
(1)
Home imposes tariff on Food, (PF/PC)H↑ or (PC/PF)H↓
QC↓QF↑;DC↑DF↓ the world as a whole [(QC+QC*)/(QF+QF*)]↓, RS shift to the left; [(DC+DC*)/(DF+DF*)]↑, RD shift to the right.
A tariff improves Home’s terms of trade and worsens Foreign’s.
Figure 5-10
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孙铱 Wednesday, January 14, 2009
(2) Home offers subsidy on cloth, (PC/PF) H ↑ QC ↑QF↓; DC↓DF↑ the world as a whole [(QC+QC*)/(QF+QF*)]↑, RS shift to the right; [(DC+ DC*)/(DF+DF*)]↓, RD shift to the left.
A Home export subsidy worsens Home’s terms of trade and improves Foreign’s.
Figure 5-11
21. Suppose that one country subsidizes its exports and the other country imposes a “countervailing” tariff that offsets its effect, so that in the end relative prices in the second country are unchanged. What happens to the terms of trade? What about welfare in the two countries?
Suppose, on the other hand, that the second country retaliates with an export subsidy of its own. Contrast the result.
(Analyse them with RS、RD curves) Answer：(本章课后题8)
When a country subsidizes its exports, the world relative supply and relative demand schdules shift such that the terms of trade for the counrty worsen. A countervailing improt tariff in a second country exacerbates this effect,moving the terms of trade even further against the first country. The first country is worse off both because fo the deterioration fo the terms of trade and the distortions introduced by the new internal relative prices. The second country definitely gains from the first country?s export subsidy, and may gain further from its own tariff. If the second country retaliated with an export subsidy then this would offset the initial improvement in the terms of trade; the “retaliatory” export subsidy definitely helps the first country and hurts the second.
FORM PPT
Home offers subsidies on cloth,
(PC/PF)H RS→RS'、RD→RD' PC/PF→(PC/PF)' (1) Foreign imposes “countervailing” tariff to offset the effect, (PC/PF)F↑ RS'→RS”、RD’→RD” (PC/PF)'→(PC/PF)”. Home is worse off because:
① worsen the terms of trade
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孙铱 Wednesday, January 14, 2009
② lose the subsidies ③ distortions.
Foreign is better off because: ①improve the terms of trade ②gain the subsidies. (2) Foreign retaliate with an export subsidy of its own (export subsidy on food ). (PC/PF)F↓ RS'→RS、RD'→RD (PC/PF)'→PC/PF. Foreign “retaliatory” export subsidies help home and hurt Foreign.
Chapter 6
22. (1) In monopolistic competition trade model, two key assumptions are made to derive the demand curve facing a typical monopolistically competitive firm: Q?S?[1/n?b?(P?P)], what is the two assumptions ?
(2)If the cost of the firm take the form C=F+ c×Q, We can derive AC=n×F/S+c and P=c+1/(b+n). How can we get the equilibrium number of firms from figure and algebra ?
(3)What is the dilemma (or constraint) of a single country ?
(4)International trade increases market size. What are the effects of the increased market size? Draw a figure to illustrate them. (5)How will the pattern of trade be?
Answer:
(1) Two assumptions:
①Each firms is assumed to be able to differentiate its product from that of its rivals. (It behaves as if it were a monopolist)
②Each firms is assumed to take the prices charged by its rivals as given. (It behaves as if it were a competitor).
(2)Market equilibrium
·We assume that all firms in this industry are symmetric, that is typical firms. All we want to know is n and P.
·The more firms there are, the less each firm sells and therefore the higher is its average cost.
(curve cc: AC=F/Q + c=n×F/S + c , n↑, AC↑)
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The more firms there are, the more intensive they compete, and hence the lower is the industry price.
(curve pp: P=c+1/(b×n) (P129-130) , n↑, P↓)
·According to the long-run-equilibrium monopolistic competition: Pe=ACe (zero-profit), n=S/bF.
Figure 6-3
(3) Economies of scale and variety of products.【规模经济以及产品差异化。】
(4)In larger market there usually will be both more firms and more sales per firm; Consumers in a large market will be offered both lower prices and a greater variety of products than consumers in small markets. （n1→n2，p1→p2）
Figure 6-4
(5) The pattern of trade is unpredicted .And history an accident determine the details of the trade pattern.【不确定；取决于历史和偶然因素】
23. “In the monopolistic competition model, trade may be divided into two kinds.
Two-way trade in differentiated products within an industry is called
intraindustry trade; trade that exchanges the products of one industry for the products of another is called interindustry trade”. Model: Home、Foreign; K、L; Manufacture and Food. Home is capital abundant. Manufacture is capital-intensive and monopolistic competition
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孙铱 Wednesday, January 14, 2009
The length of the arrows indicates the value of trade in each direction. Because manufactures is monopolistically competitive industry, Home and Foreign will produce differentiated goods, it will import as well as export manufactures, giving rise to intraindustry trade.
24. “External economies can cause countries to get ?locked in? to undesirable pattern of specialization and can even lead to losses from international trade”. Explain the argument with example.(课本151-152) ⑴ external economies an specialization
Figure 6-9
The average cost curve for Thailand, ACTHM, lies below the average cost curve for Switzerland, ACSWISS. Thus Thailand could potentially supply the world market more cheaply than Switzerland. If the Swiss industry gets established first, however, it may be able to sell watches at the price P, which is below the cost Co that an individual Thai firm would face if it began production on its own. So a pattern of specialization established by historical accident may persist even when new producers could potentially have lower costs.
⑵ External economies and losses form trade.
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