{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

assign3_0910 - University of Hong Kong 2nd semester...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
University of Hong Kong 2 nd semester 2009-2010 ECON0301 Theory of International Trade Assignment 3 Y. Stephen Chiu Due time: 5pm, 12 March 2010 (Friday) Answer all of the following questions, and hand in your scripts to your TA (Mr. DAI Ming) on or before the deadline via his pageon box on the 9 th floor of K.K. Leung Building. 1. (Ricardian model) Consider a many good Ricardian model as follows. There are 5 goods: 1, 2, 3, 4, and 5. Their unit labor requirements in home and foreign countries are as follows: Good Home Unit Labor Requirement (a i ) Foreign Unit Labor Requirement (a i *) Relative Home Productivity Advantage (a i */a i ) 1 1 10 10 2 5 40 8 3 3 12 4 4 6 12 2 5 12 9 0.75 Let L and L* be 100 and 150, respectively. Suppose each country always spends1/5 of its income on each good. (This comes from the utility maximization problem when the utility function is Cobb-Douglas, i.e., u= x 1 0.2 x 2 0.2 x 3 0.2 x 4 0.2 x 5 0.2 .) a. Write down the relative supply of home labor over foreign labor (as a function of w/w*, the ratio of home wage rate over foreign wage rate). Draw it in a graph.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern