国际经济学题库答案(孙铱090621)

Home offers subsidies on cloth, (P/P) RS?RS'、RD?RD' P/P?(P/P)' CFCFCFH (1) Foreign imposes “countervailing” tariff to offset the effect, (P/P)? RS'?RS”、RD’?RD” (P/P)'?(P/P)”. CFCFFCF Home is worse off because: ? worsen the terms of trade 27 孙铱 Wednesday, January 14, 2009 ? lose the subsidies ? distortions. Foreign is better off because: ?improve the terms of trade gain the subsidies. ? (2) Foreign retaliate with an export subsidy of its own (export subsidy on food ). ((.P/P)? RS'?RS、RD'?RD P/P)'?P/PCFCFCF F 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: , what is the two assumptions ? Q,S，[1/n,b，(P,P)] (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: ?Each firms is assumed to be able to differentiate its product from that of its rivals. (It behaves as if it were a monopolist) ?Each 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?) 28 孙铱 Wednesday, January 14, 2009 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) (P) , n?, P?) 129-130 ?According to the long-run-equilibrium monopolistic competition: P=AC (zero-profit), n=. eeS/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 29 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) ? 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. ? External economies and losses form trade. 30 孙铱 Wednesday, January 14, 2009 Figure 6-9 When there are external economies, trade can potentially leave a country worse off than it would be in the absence of trade. In this example, Thailand imports watches from Switzerland, which is able to supply the world market (DW0RLD) at a price (P1) low enough to block entry by Thailand producers who must initially produce the watches at cost Co. Yet if Thailand were to block all trade in watches, it would be able to supply its domestic market (DTHAI) at the lower price P2. Chapter 7 25. International borrowing and lending is regarded as intertemporal trade. (1)Explain intertemporal comparative advantage、gains form intertemporal trade. (2)How could gains form intertemporal trade affect the concept of “external balance”? Answer: ? The sources of intertemporal comparative advantage are somewhat different from those that give rise to ordinary trade. A country that has a comparative advantage in future production of consumption goods is one that in the absence of international borrowing and lending would Jiave a low relative price of future consumption, that is, a high real interest rate. This high real interest rate corresponds to a high return on investment, that is, a high return to diverting resources from current production of consumption goods to production of capital goods, construction, and other activities that enhance the economy's future ability to produce. So countries that borrow in the international market will be those where highly productive investment opportunities are available relative to current productive capacity, while countries that lend will be those where such opportunities are not available domestically. ? When a country borrows, it get the right to purchase some quantity of consumption at present in return for repayment of some larger quantity in the future; (1+r) times; the relative price of Q is (1+r). P Intertemporal comparative advantage and intertemporal trade 31 孙铱 Wednesday, January 14, 2009 Figure 7A-2 Figure 7A-3 Home?s intertemporal PPF is biased toward Q?? stronger present productive P capacity relative to future productive investment opportunity. If the preferences are the same, the relative price of Q in Home is lower than the Foreign?s (intertemporal P comparative advantage). Home exports present consumption (lending) while Foreign exports future consumption (borrowing). +r) =DF?QF Home: (QP?DP)(1 Foreign: QF*?DF*= (DP*?QP*)(1+r) Chapter 8 26.Suppose X and Xare inputs of the production of X,the input-output coefficient 23 1 =0.2, =0.5. The import tariff of X、X and X are as followings, please ,,2131123 calculate the effective rate of protection of X. 1 (1)t=30%、t=20%、t=10% 123 (2)t=30%、t=40%、t=50% 123 Answer: ERP=(V?V) / V TWW V: value added in the presence of trade policies T V: value added at world price W (1) V=(1–0.2–0.5) =0.3 W V = [(1+0.3) –0.2×(1+0.2)–0.5×(1+0.1)] =0.51 T ERP =(V?V) / V =(0.51–0.3) / 0.3=70% TWW (2) V=(1–0.2–0.5) =0.3 W V = [(1+0.3) –0.2×(1+0.4)–0.5×(1+0.5)] =0.27 T ERP = (V?V) / V = (0.27–0.3) / 0.3=-10% TWW 27. Home?s and Foreign?s demand curve and supply curve are: D=100,20P S=20+20P D*=80,20P S*=40+20P Starting from free trade (PW=1.5, D*=50, S*=70), assume that Foreign offers exporters a subsidy of 0.5 per unit. (1) Calculate the effects on the price in each country; (2) Calculate the effects on Home?s welfare, both of individual groups and of the economy as a whole. Answer: XS=MD，PS= PS*,0. 5 32 孙铱 Wednesday, January 14, 2009 (40+20 PS*),(80,20 PS*)=[100,20×(PS*,0.5)],[20+20×(PS*,0.5)] 80 PS*=140，PS*=1.75，PS=1.25 C* : ,(a+b)=1/2×(45+50)×(1.75,1.50)=,11.25 P* : +(a+b+c)=1/2×(75+70)×(1.75,1.50)=+18.125 G* : ,(b+c+d+e+f+g)= (75,45)×(1.75,1.25)=,15.0 N* : ,[(b +d)+(e+f+g)] =,8. 75 C : +(a+b+c+d)=1/2×(70+75)×(1. 5,1.25)=+18.125 P : ,a=,1/2×(45+50)×(1. 5,1.25)=,11. 25 G: 0 N: + (b+c+d) =+6.875 28. The nation of Acirema is “small”, unable to affect world prices. It imports peanuts at the price of $10 per bag. The demand curve is D=500–10P .The supply curve is S=50+5P. Determine the free trade equilibrium. Then calculate and graph the following effects of an import quota that limits imports to 150 bags. (1)The increase in the domestic price (2)The quota rents (3)The consumption distortion loss (4)The production distortion loss Answer: P=10$，D=400,10P=300，S=50+5P=100 A quota limiting the import of peanuts to 50 bags, 33 孙铱 Wednesday, January 14, 2009 a. MD=D,S=(400,10Pq),(50+5 Pq)=50，Pq=20; D=400,10×20=200，S=50+5×20=150 b. The quota rents are (20$,10$)×50=500$. c. The consumption distortion loss is 1/2×(300,200)×(20,10)=500$ d. The production distortion loss is1/2×(150,100)×(20,10)=250$ 29. Initially, a tariff and an import quota of a “small” country raise domestic price to the same level. How will the following situations affect domestic production, consumption and import? Draw figures to analyse and compare these effects，respectively. (1) The world price of import goods decline suddenly. (2) Domestic income, and then demand, increases greatly. Anwer: (1) 如上图，商品的世界价格突然下降: ?在关税条件下，造成国内价格同幅度下降。这时会刺激国内消费，但由 于价格下降国内厂商会减少生产。需求的增长将依靠进口补充，还会进一 步造成国内生产的萎缩。() ?在配额条件下，由于配额固定，即便价格下降也不能增加进口。国内市 场的供求不受这一变化的影响。 (2) 国内居民收入上升，使得需求上升，国内需求曲线右移。 ?在关税条件下，国内需求上升，在小国假设下，其不足以影响国际市场 上的世界价格。进口品的价格不变，所增加的需求将全部由进口商品补足。 ?在配额条件下，国内需求增加，但进口配额是的进口商品数额不变。国 内增长的需求将刺激国内厂商增加生产。需求缺口全部由国内厂商生产补足。 综上可知，进口配额是比关税更加严格、苛刻的一种保护手段。 Chapter 9 30. “U.S. farm exports don?t just mean higher incomes for farmers — they mean higher income for everyone who sell goods and services to the U.S. farm sector”. This remark is a potential valid argument for export subsidy. 34 孙铱 Wednesday, January 14, 2009 Answer: The higher income of farmers due to export subsidies and the potentially higher income to those who sell goods and services to the farmers come at the expense of consumers and taxpayers. Unless there is some domestic market failure, an export subsidy always produces more costs than benefits. Indeed ,if the goal of policy is to stimulate the demand for the associated goods and services should be targeted directly at these goals. 【农民因为出口补贴而增加的收入和那些把产品以及服务出售给美国农业部门的人所增加 是收入都是以消费者和纳税人的利益作为代价的。一般情况下，出口补贴的成本大于收益， 除非存在国内市场失灵。事实上，如果一项政策的目的是增加相关产品或服务的需求，那么 这项政策应该以需求为直接目标。】 31. What is the domestic market failure argument against free trade? How convincing is the market failure argument? Answer: The domestic market failure argument against free trade ?Domestic market failure: dual labor market; imperfect capital market; technological spillover, ?????? ?Technological spillover case for protection If the production of a good yields experience that improve the technology of the economy as a whole but the firms can?t get this benefit (the market failure of externality), a sufficiently small tariff that yields marginal social benefit must outweigh the efficiency loss. Figure 9-3 The Domestic Market Failure Argument for a Tariff TRADE POLICY (tariff): P:+a C:,(a+b+c+d) G: +c MSB:+e N: e,(b+d) 3. How convincing is the market failure argument? (1)?“Specific rule”: domestic market failure should be corrected by domestic policies aimed directly at the problem?s sources. If the same production increase (S to S) were achieved via a production subsidy 12 rather than a tariff, the consumption loss b will be avoided. 35 孙铱 Wednesday, January 14, 2009 ?Trade policies are always “second-best” rather than “first-best” policies——even though the cost of the trade policies are less apparent. Most deviations from free trade are adopted not because their benefit exceeds their costs but because the public fails to understand their true costs. (2)Economists can?t diagnose market failure well enough to prescribe policy. ?Wage differentials case for protection: A tariff to protect urban industrial sectors in LDC will draw the unemployed into productive work and thus generate social S benefits that more than compensate for its cost. ?However, this policy will encourage so much migration to urban areas that unemployment will, in fact, increase. ?The difficulty of ascertaining the right second-best trade policy to follow reinforce the political argument for free trade mentioned earlier. (3)The domestic market failures cut both ways. If there is marginal social costs rather than marginal social benefits, a tariff or import quota will produce extra costs over and above the conventional measures. Thus, domestic market failure reinforces the case for free trade. 32. A small country can import a good at a world price of 10 per unit. The domestic supply curve of the good is S=50+5P. The demand curve is D=400–10P. In addition, each unit of production yields a marginal social benefit of 10. (1)Calculate the total effect on welfare of a tariff of 5 per unit levied on imports. (2)Calculate the total effect of a production subsidy of 5 per unit. (3)Why does the production subsidy produce a greater gain in welfare than the tariff? (4)What would the optimal production subsidy be? Answer: (1). National welfare of a tariff 5 per unit: e,(b+d) = 250,(62.5+125) = 62.5 36 孙铱 Wednesday, January 14, 2009 (2). National welfare of a production subsidy 5 per unit: e,b = 250,62.5 = 187.5 (3). Production subsidy is conform to the “specific rule”, it can avoid consumption distortion. (4). The best policy is to have producers fully internalize the externality by providing a subsidy of 10 per unit. 33. Discuss the political economy of these viewpoints: (1)Trade policies that hurt far more voters than they help can be adopted. (2)Bilateral and multilateral negotiations can lead to freer trade. Answer: (1) It sounds quite reasonable. It?s a problem of collection .while it is in the interests of the group at a whole to press for favorable policies, it is not any individual?s interest to do so. (Political activity on behalf of a group is a public good.) (2) .The advantage of negotiation ? A mutual agreement helps mobilize support for free trade: By bringing in both domestic exporters as a counterweight, both governments are better able to resist pressure form domestic interest groups. American: producers of TV + exporters of Auto China: producers of Auto +exporters of TV ? A mutual agreement helps governments avoid trade war. Table 9-3 The Problem of Trade Welfare ?Assumption: (a) Each country?s government would choose protection if it could take the other country?s policy as given: The political difficulty to give up protection. (b) They would be better off if both chose free trade: The efficiency gain and “dynamic gains”. ?Conclusions: (a) If the countries act unilaterally to protect, there is a trade war that leaves both worse off. (b) A mutual agreement can make both better off. 34. Trade creation and trade diversion 37 孙铱 Wednesday, January 14, 2009 35. As the following figure shows, D、S and P are the demand curve、supply curve AAA and price of automobile in country A. P and P are the price of automobile in BC country B and C, respectively. t is the tariff of automobile imposed by country A. (1)Illustrate the direction and volume of automobile trade of Country A. (2)If country A forms a customs union with country B (the union?s tariff is still t). Will the national welfare of country A increase or decline? What does it depend on? (3)If country A cut down tariff unilaterally to Pcts′=P. Will the national welfare aB of country A higher or lower than that in (2)? Answer: A forms a customs union with B, is it desirable for A? P: –a C: +(a+b+c+d) G: –(c+e) N: (b+d)–e b+d: welfare of trade creation e: welfare of trade divesion 12?If the supply decrease (S to S) were caused by unilateral tariff reduction rather than customs union, how would the national welfare of A be? P: –a C: +(a+b+c+d) G: – (c+e)+(e+f+g) 38 孙铱 Wednesday, January 14, 2009 N: (b+d)+(f+g) 36. Eastern European nations such as Poland and Hungary joined the European Union in 2004. Discuss the potential economic costs of such an expansion of the European Union, form the point of view of (1) Eastern Europe;(2) Western Europe; and (3)other nations.(该题目属于探讨性的) Chapter 10 37. “Japan?s experience makes the infant industry case for protection better than any theory. In the early 1950s Japan was a poor nation that survived by exporting textiles and toys. The Japanese government protected what at first were inefficient, high-cost steel and automobile industries, and those industries came to dominate world markets.” Discuss critically. (该题目属于探讨性的) 38. Suppose a country has the Harris-Todaro problem. That is, for some reason urban wages are much higher than rural, leading to inefficiently low manufacturing production, but at the same time there is high urban unemployment because rural workers migrate to the cities in search of high-wage jobs. Which of the following polices could solve the problem? Explain them. (1) A wage subsidy to agricultural worker (2) A subsidy to manufacturing production (3) A tariff or import quota on manufactured goods. ? Wage subsidy——the best(根据对症规则，这是最优选择) ? Production subsidy——the second best: production distortion(这会带来生 产的扭曲，使得国内市场丧失效率，同时这不仅补贴了工人，同时补贴了 资本占有者，并没有使得所有的补贴都对工人有益) ? Tariff or import quota——the third best: production and consumption distortion (关税和进口配额会带了生产和消费的双重扭曲，这种情况下的损失最为严 重。对于国内厂商的利益都是以国内消费者的利益损失为代价，同时，厂商并不 会直接增加工资和提供更多的岗位，这同目标向去甚远。) 39