final-eco101-06-A

final-eco101-06-A - Name Student ID Economics 101 —...

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Unformatted text preview: Name: Student ID: Economics 101 — Spring 2006 International Trade Final Exam June 14, 2005 Time: 110 minutes Total score: 110 points Student Consent for Release of Student Information (Buckley Waiver) I hereby authorize the UCSD Economics Department to return my graded examination by placing it in a location accessible to all students in the course. I understand that the return of my examination as described above may result in disclosure of personally identifiable information, which is not public information as defined in UCSD PPM 160-2, and I hereby consent to the disclosure of such information. Signature Date 1 Name: Student ID: 1 Trade of Multiple Goods: 10 minutes Unit labor requirements for Home (no asterisk) and Foreign (asterisk) are given by Home Foreign Avocados a LA = 1 a * LA = 3 Bronze a LB = 2 a * LB = 1 Computers a LC = 2 a * LC = 2 Diamonds a LD = 10 a * LD = 10 • Rank the goods in terms of Home’s comparative advantage. • Let the international wage ratio w/w * vary between .75 and 1.25. Which good(s) does Home import over the whole range, which good(s) does Home import in the high range close to 1.25? • Now suppose trade costs add 50% to the cost of each good when shipped. Let the international wage ratio w/w * vary between .75 and 1.25 again. Which good(s) does Home import over the whole range, which good(s) does Home import in the high range close to 1.25? 2 Name: Student ID: 2 Gains from Trade and Specialization: 10 minutes The diagram below shows an endowment economy in autarky. The point labelled A is the country’s endowment with goods C and F . Autarky. Depict the relative consumption price ratio of the two goods in autarky. Gains from trade. Choose any relative world price ratio that differs from the country’s autarky price ratio and depict that world price ratio. Show that there are gains from trade. Gains from specialization. Now draw a production possibility frontier consistent with autarky consumption. Choose the same relative world price ratio as above and show the change in the country’s production pattern after trade. Are the gains from trade for this production economy larger or smaller than for the endowment economy before? Home food output H o m e c o m p u t e r o u t p u t Q C Q F Utility A 3 Name: Student ID: 3 Labor Productivity Change: 10 minutes There are two countries, Home (no asterisk) and Foreign (asterisk). Labor is the only factor of production and can be allocated to the production of cheese or wine. The relative demand and relative supply of cheese and wine are depicted in the following graph ( a Li denotes unit labor requirements in producing good i , L and L * are Home and Foreign labor forces)....
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This note was uploaded on 10/27/2011 for the course ECON 101 taught by Professor Jacobson during the Fall '03 term at UCSD.

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final-eco101-06-A - Name Student ID Economics 101 —...

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