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midterm1-eco101-09

midterm1-eco101-09 - Name Student ID Economics 101 Fall...

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Name: Student ID: Economics 101 — Fall 2009 International Trade First Midterm Exam October 20, 2009 Time: 70 minutes Total score: 70 points Carefully read the instructions of each question. Words in bold indicate that you need to respond to the request or question. Whatever you answer, also provide a brief explanation. I hereby authorize the UC San Diego Economics Department to return my graded exam- ination 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 UC San Diego PPM 160-2, and I hereby consent to the disclosure of such information. Name Date 1
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Name: Student ID: 1 Unbalanced Productivity Growth: 10 minutes There are two countries and two sectors, agriculture (A) and manufacturing (M). Produc- tivities in the two sectors in Home (no asterisk) and Foreign (asterisk) are given by the following constant unit labor requirements: Home Foreign Agriculture a LA = 3 a * LA = 4 Manufacturing a LM = 2 a * LM = 1 State the autarky price of manufactured goods in terms of agricultural goods at Home ( P M /P A ). In what sector does Home have a comparative advantage? What good will Home export if there is complete specialization in at least one country? Suppose the foreign country raises agricultural productivity so that a * LA = 1. Does this change the good that Home exports? 2
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Name: Student ID: 2 Balanced Productivity Growth: 10 minutes There are two countries and three sectors: agriculture (A), manufacturing (M) and services (S). Wages differ by a factor of w/w * = 3 / 2 between the two countries. Productivities in the three sectors in Home (no asterisk) and Foreign (asterisk) are given by the following constant unit labor requirements: Home Foreign Services a LS = 1 a * LS = 2 Manufacturing a LM = 2 a * LM = 2 Agriculture a LA = 4 a * LA = 3 State
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