ECON 178: International Trade Spring 2009 Assignment #1
Due on Friday, April 17th, before the class. Typed assignments will receive 2% bonus. 1. The production possibility frontiers for Home and Foreign (*) are depicted in the graph below. Both countries
Econ 178: International Trade Winter 2009 Practice Problem Set #1
1. What were the basis for trade and the pattern of trade according to Adam Smith? In what way was Ricardos law of comparative advantage superior to Smiths theory? According to Smiths theor
ECON 178: International Trade Spring 2009 Assignment #1 Answer Key
Question 1 (a) The opportunity cost of cheese in terms of wine is equal to the slope of the countrys PPF. aLC L / aLW 40 aLC * L* / aLW * 50 = = =2 = = =1 aLW L / aLC 20 aLW * L* / aLC * 5
International Trade ECON 178
Professor David Christafore
Name and ID
Specific Factors Model
Suppose that food production uses land and labor, while cloth production uses capital and labor.
Labor is mobile between the food and cloth industries, whil
Assignment 3 Answers
1. a. This is the usual step-function with relative prices of 2 and 6 for the horizontal sections and
relative demand of 2 at the vertical section (1000/4)/(125/1).
b. y-intercept=8; x-intercept=4; relative price at RD=2 is RP=4. The
Econ 178 International Trade Exam 2
Consider a Ricardian model of trade in which there is a world with two goods (peaches and
bananas) and two countries (C-land and D-stan). In C-land it takes 4 hours to produce a peach
and it takes 4 hours to produce a b
Econ 178 International Trade Exam 1
Consider a Ricardian model of trade in which there is a world with two goods (cars and shirts)
and two countries (C-land and D-stan). In C-land it takes 24 hours to produce a car and it takes 2
hours to produce a shirt.
ECON 178: International Trade Spring 2009 Assignment #2 Answer Key
1) The terms of trade of the U.S. are given by the world relative price of manufactures in terms of raw materials (PM/PR). The terms of trade change can be determined by the shifts in the
ECON 178: International Trade Spring 2009 Assignment #3 Due on Wednesday, June 3, before the class. 1. a. Which of the following two countries would you expect to have comparative advantage in current consumption, and which in future consumption goods? i.