Gravity Model Problem Set
SOLUTIONS
International Trade Theory
ECO364
Assistant Professor Peter M. Morrow
Due: January 20th, 2014
Recall the gravity model of international trade in which trade between two countries i and
j can be summarized by the followi
ECO364
Problem Set 1
Answer Key
1. (a) Let pX and pY be the price of X and Y respectively. Under autarky, the relative price is
equal to the marginal rate of transformation. Therefore,
M P LY
pX
=
= 2.
pY
M P LX
Consumer optimization implies that the marg
Gravity Model Problem Set
International Trade Theory
ECO364
Assistant Professor Peter M. Morrow
Due: January 20th, 2014
Recall the gravity model of international trade in which trade between two countries i and
j can be summarized by the following regress
ECO364
Problem Set 3
1. Home produces two goods, X and Y, using two factors, capital and labor. The amount of
labor required to produce a unit of X is 1, and a unit of Y is 2. The amount of capital required
to produce a unit of X is 1 and a unit of Y is 3
Gravity Model Problem Set
International Trade Theory
ECO364
Assistant Professor Peter M. Morrow
Recall the gravity model of international trade in which trade between two countries i and
j can be summarized by the following regression:
Xij = e 0 Yi 1Y j2
Ricardian Problem Set
ECO364
University of Toronto
Professor Peter M. Morrow
The details of the model are as follows:
Two countries: North and South
Two goods: computers and textiles
DC and DT are consumption levels of computers and textiles.
QC and QT ar
Gravity Model Problem Set
Economics 364: International Trade Theory
Associate Professor Peter M. Morrow
SOLUTIONS
Recall the gravity model of international trade in which exports from country i to country j (Xij )
can be described by the following regress
Ricardian Problem Set
ECO364
University of Toronto
Professor Peter M. Morrow
The details of the model are as follows:
Two countries: North and South
Two goods: computers and textiles
DC and DT are consumption levels of computers and textiles.
QC and QT ar
Ricardian Problem Set
ECO364
University of Toronto
Assistant Professor Peter M. Morrow
The details of the model are as follows:
Two countries: North and South
Two goods: computers and textiles
DC and DT are consumption levels of computers and textiles.
QC
ECO364 International Trade Theory
Problem set 1
Due date: January 26 in class or earlier by appointment
Suppose that Canada and U.S. trade automobiles (A) and cloth (C). In
the U.S. it takes one worker one full month to produce 1 car and 1 of a month
2
to
ECO 364 - Topic 1
The Ricardian Model
Kunal Dasgupta
Dasgupta (UofT)
Ricardian model
1 / 36
Motivation
Switzerlands trade
Switzerland is one of the biggest exporters of precision equipments
like watches.
One of the main imports of Switzerland is footwear.
Gravity Model Problem Set
SOLUTIONS
International Trade Theory
ECO364
Assistant Professor Peter M. Morrow
Due: January 20th, 2014
Recall the gravity model of international trade in which trade between two countries i and
j can be summarized by the followi
MID-TERM (FALL 2013)
ECO364 (L0101)
Answer Key
1. Short answer type questions (9 points)
(a) In the short run, a country might import everything. But eventually, trade has to balance,
implying that the country must start to export. And what it trades will
Heckscher-Ohlin Practice Problem (solutions)
Assume that all of the standard Heckscher-Ohlin assumptions hold. Note that given
perfect competition, all countries behave as price takers. Suppose we observe that
Spain produces both wine and steel. Suppose w
ECO364
Problem Set 1
Answer Key
1. (a) Let pX and pY be the price of X and Y respectively. Under autarky, the relative price
is equal to the marginal rate of transformation. Therefore,
pX
M P LY
=
= 2.
pY
M P LX
Consumer optimization implies that the marg
ECO364: Second Practice Ricardian Problem
Two goods: Computers and Furniture.
Two countries: Home and Foreign.
There are 300 workers in Home and 30 workers in Foreign.
For Home, the unit labor requirement is 8 for computers and 20 for furniture
For Foreig
IMPORTANT:
Place your NAME and ID NUMBER on your bubble form.
ECO364 H1F, Summer 2013
Instructor: Mengxiao Liu
Final Exam
June 27, 2013
10:10am-1:10pm
Fill in the information below:
Name_
Student ID _
INSTRUCTIONS
1. This exam has 15 pages. Make sure that
ECO364
Problem Set 1
Ricardian model
1. Home can produce two goods - X and Y using only labor. The technology for producing the two goods is given by M P LX = 1 and M P LY = 2. Home has 60 workers.
1
Preferences are given by U = (XY ) 2 .
(a) What is the
ECO364 International Trade Theory
Problem set 3: Heckscher-Ohin model
Due date: February 9 in class or earlier by appointment
Problem 1
Suppose two countries, H and F , trade two goods - steel (S) and wheat
(W ) - and use two factors of production - capit
IMPORTANT:
Place your NAME and ID NUMBER on your scantron form.
Economics 364H1F, Fall 2011
Final Exam
June 26, 2012
10:10am-13:10pm
Fill in the information below:
Name_
Student ID _
INSTRUCTIONS
1. This exam has 16 pages. Make sure that you have all of t
Imperfect Competition and Trade
Problem Set #4
Economics 364H1F
Prof. Peter M. Morrow
I) Equilibrium in the Monopolistic Competition Model
In a market characterized by monopolistic competition we have assumed that an
individual firm faces the following de
ECO364 International Trade Theory
Problem set 2
Due date: February 2 in class or earlier by appointment
Problem 1
Canada and U.S. trade two products with each other - Cars (C) and
Textile (T ). Denote all US variables with !. Each product is produced usin
ECO364 International Trade Theory
Session 4: Heckscher-Ohlin model
Andrey Stoyanov
University of Toronto
Heckscher-Ohlin model: Introduction
I
Up to this point we analyzed cross-country dierences in
productivities as a single source of comparative advanta
ECO364
Problem Set 2
1. Consider the specic factors model with two sectors X and Y . The specic factor for
producing X is capital, while the specic factor for producing Y is land. Labor is used in both
sectors and is fully mobile. A change in the preferen
IMPORTANT: Place your NAME, FORM NUMBER
and ID NUMBER on your scantron form.
Economics 364H1F, Fall 2008
International Trade
Professor Peter Morrow
FINAL EXAMINATION
SOLUTIONS
December 12th, 2008
FORM 1
Fill in the information below:
Name_
Student ID _
IN
IMPORTANT:
Place your NAME and ID NUMBER on your scantron form.
Economics 364H1F, Fall 2011
Assistant Professor Peter Morrow
Final Exam
SOLUTIONS
December 19th, 2011
7:00pm-10:00pm
Fill in the information below:
Name_
Student ID _
INSTRUCTIONS
1. This exa
Imperfect Competition and Trade
Practice Problem
Economics 364H1F
Prof. Peter M. Morrow
I) Equilibrium in the Monopolistic Competition Model
In a market characterized by monopolistic competition we have assumed that an
individual firm faces the following
Ricardian Problem Set
ECO364
University of Toronto
Associate Professor Peter M. Morrow
DUE: Monday, February 8th, 2016
The details of the model are as follows:
Two countries: North and South
Two goods: computers and textiles
DC and DT are consumption leve
ECO364: International Trade
Mengxiao Liu
University of Toronto
[email protected]
ECO364 (International Trade) Summer 2013
1
Administration: Books and Blogs
We will use International Economics: Theory and Policy by Paul
R. Krugman, Marc J. Mel
ECO 364 - Topic 6
Offshoring in the Global Economy
Kunal Dasgupta
Dasgupta (UofT)
Offshoring
1 / 30
Offshoring
What is it
In 1817, when David Ricardo introduced his idea of comparative
advantage, he used the example of England and Portugal trading wine
an
ECO364
Problem Set 1
Answer Key
1. (a) Let pX and pY be the price of X and Y respectively. Under autarky, the relative price is
equal to the marginal rate of transformation. Therefore,
M P LY
pX
=
= 2.
pY
M P LX
Consumer optimization implies that the marg
University of Toronto
ECO364H1F - International Trade
Fall 2014
Useful information
Lectures :
Tuesday 10:10 a.m.- 12:10 p.m. in LM 162 (L0101)
Tuesday 2:10 p.m.- 4:10 p.m. in MP 102 (L0201)
Instructor : Prof. Kunal Dasgupta
Office : Max Gluskin House, 1
ECO 364
Introduction
Kunal Dasgupta
Dasgupta (UofT)
Introduction
1 / 10
Motivation
Why trade matters
The financial crisis of 2008 was a global phenomenon - most countries
in the world were adversely affected.
Some of these countries had a fragile financia